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Metal Bulletin’s 20th Bauxite & Alumina conference in Miami wrapped up on Wednesday February 26. As ever, there were many things to learn. In no particular order, here are ten of them.
1. China will struggle to fill the bauxite supply gap left by Indonesia’s ban on mineral exports.
Rio Tinto Alcan’s Demian Reed was one but by no means the only voice warning that China could find it very difficult to replace the millions of tonnes of bauxite it was importing from Indonesia before the export ban kicked in at the start of the year.
2. China will not struggle to fill the bauxite supply gap left by Indonesia’s ban on mineral exports.
However, Metal Bulletin Research’s Martin Haller noted that much of China’s recent bauxite imports have been put into inventories, with 72 million tonnes imported in 2013 against physical requirements of about 40 million tonnes. It has also been casting the net wide for new sources, including the Dominican Republic.
3. The Dominican Republic exported 2 million tonnes of bauxite to China last year.
We did not know that.
4. Fly ash and aluminous clays will be a much bigger factor in the metallic alumina market in the coming years.
We kind of knew that.
5. While many in the West have been debating the extent to which Indonesia will see its export ban through, China has always assumed the ban will be enacted as planned.
China’s stockpiling of Indonesian bauxite and its new sourcing from countries such as Guyana, Malaysia, and Brazil reveals that it has maintained a more practical view of the ban than many people.
6. China has two-three years to play with before it has to seriously think about an alternative to Indonesian supply.
With about 50 weeks of inventory stockpiled, and with the new bauxite sources it has fostered relationships with, China has a healthy buffer of bauxite supply.
7. Seriously, it’s all about China.
Every major development in the bauxite industry in recent years has been driven by Chinese demand. Every major change in the coming years will be driven by Chinese demand.
8. Now is the time to get started on new alumina projects.
A few delegates from companies holding licenses asked speakers if now is a good time to move forward with constructing assets. They said yes.
9. Government policy will be a major influence on developments in bauxite and alumina.
It’s all about China, but it’s also about what individual governments want from their mineral assets. Market fundamentals will not decide every move.
10. Middle Eastern aluminium companies will develop upstream, not down.
Zouhir Mazili of newly merged Emirates Global Aluminium listed an impressive number of upstream projects that the company formerly known as Emal and Dubal are committed to, confirming the lesson from last year’s Arabal conference that aluminium producers will support the nascent local downstream industry, but not invest directly in it.
Send us a tweet or an email and let us know what the key thing was for you.
Jethro Wookey jwookey@metalbulletin.com Twitter: @jethrowookey_mb