PRICING NOTICE: Metal Bulletin will launch reference prices for the bauxite market

In response to calls for a new pricing mechanism for the bauxite market, Metal Bulletin plans to publish two spot price assessments, launching in April.

The two single-figure price assessments will be based on spot market data relating to bauxite sold out of Brazil and Guinea.

Initial specifications for stand-alone fob Brazil and fob Guinea price assessments have been devised following an initial market consultation. They have been designed to reflect the most commonly traded spot volumes shipped from these origins.

Metal Bulletin is now opening up its consultation to the wider market.

Metal Bulletin’s price assessment methodology will be applied in respect of both prices, whereby greater weighting is given to actual concluded transaction data.

While the broad spectrum of bauxite samples makes this market suitable for an index – a tonnage weighted calculation – the relative immaturity and illiquidity of the spot bauxite market lends it to a price assessment for now.

Metal Bulletin’s index analysts will continue to monitor data collected for the bauxite price assessments, including that which does not fall into the initial specification, to create an accurate and reliable index model. In due course, this will allow for a broader range of material to be incorporated and normalised to a base specification.

With this in mind, the two assessments will both be published as a single figure to facilitate an easy transition to an index at a later date.

Changing market dynamics, such as increasing integration, regional investments and rising third-party volumes, mean Metal Bulletin will continue to review the most commonly traded spot volumes during this process.

The specifications under consideration for the initial two single-figure price assessments are as follows:

Bauxite fob Kamsar, Guinea
Units: $ per tonne per dmtu
Basis: fob Guinea
Chemical specification: Total alumina – min 48.5%; max 53%; total silica – min 1.20%; max 2.10%; reactive silica – max. 3.2%; Fe – max 22%; Ti – max 4%; organic carbon – max 0.15%; moisture content – min 5.5%; max 7.5%
Trade size: minimum 20,000 tonnes
Payment terms: 30 days after loading
Loading port: Kamsar, other ports normalised
Loading window: within two months
Delivery method: bulk carrier
Publication: Fortnightly on Thursdays between 2pm and 3pm London time

Bauxite fob Trombetas, Brazil
Units: $ per tonne per dmtu
Basis: fob Brazil
Chemical specification: Total alumina – min 50.5%; max 55%; total silica – min 4.3%; max 5.6%; reactive silica – min 4%; max 5%; Fe – max 12 %); Ti – max 1.5%; moisture content – min 9%; max 10%
Trade size: minimum 20,000 tonnes
Payment terms: 30 days after loading
Loading port: Trombetas, other ports normalised
Loading window: within two months
Delivery method: bulk carrier
Publication: Fortnightly on Thursdays between 2pm and 3pm London time

Metal Bulletin is seeking feedback from those active in the bauxite market on the proposed price assessments.

This consultation will last four weeks and will close on Wednesday April 12. It is intended that the new assessments will follow the same publication calendar as the fob Brazil alumina index, starting on Thursday April 27. Metal Bulletin will notify the market of the final price specification ahead of this date.

If you have any queries or feedback concerning the proposal above, or would like to contribute to the price assessments, please contact Charlotte Radford at charlotte.radford@metalbulletin.com.

Questions relating to Metal Bulletin’s pricing methodology and policy should be sent to Metal Bulletin’s global ores, alloys and minors editor, Fleur Ritzema, at
fritzema@metalbulletin.com.

Recent Base Metals News

Editor's pick