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China Aluminum Oxide Factories Capacity Expansion Leads to Increasing Demand for Caustic Soda

In the first half of 2014, China's aluminum oxide market was in a downturn period. At the beginning of 2014, Indonesia bauxite was banned from exporting. Consequently, China's stock of bauxite declined at one time.

From: iAbrasive.comDate: 2014-10-24 08:40:52Views: 393

In the first half of 2014, China's aluminum oxide market was in a downturn period. At the beginning of 2014, Indonesia bauxite was banned from exporting. Consequently, China's stock of bauxite declined at one time. It was difficult for Chinese aluminum oxide manufacturers to purchaser raw materials. Most aluminum oxide factories had to stop production. As a major aluminum oxide producing province, Shandong regions suffered a loss of over 50% in terms of rate of production. The decline of the aluminum oxide output further contributed to the increase in price. The price of domestic market spot goods rose to 2,700 Yuan per ton, and in June, it was around 2,300Yuan to 2,400 Yuan per ton, which reflected the increase in demand.

bauxite

For the raw material—bauxite, since Indonesia banned the bauxite form being exported, China's bauxite importing companies have expanded bauxite source and made great progress. Currently, China's bauxite mainly comes from Australia, India, Malaysia, South America, and Africa. Australia ha become the first bauxite supplier for China. In July 2014, the total import volume of bauxite was over 3,000,000 tons, among which 1,660,000 tons were from Australia. That's more than a half proportion. The import from India in the same period was 900,000 tons. Despite the fact that India has raised tariff, it had little influence on the import price of India's bauxite. With the expanding of capacity, India is expected to export more bauxite to China in the days to come. China's bauxite port inventory is about 3,500 tons and the figure will not decline in the latter half of the year. At present, most domestic bauxite consumers have abundant goods in stock. For the continuous increase in consumption, China's aluminum oxide companies keep expanding capacity.

In the latter half of 2014, China's aluminum oxide installation has recovered gradually and some projects have been expanded or newly added, which has without doubt increased the purchasing power for the raw material—caustic soda. However, domestic caustic soda market has experienced nearly eight-month downturn period, the overall rate of operation is 70% or so. A better maintenance of foreign and domestic supply and the recovery and expansion of aluminum oxide capacity have facilitated domestic demand substantially. During the autumn maintenance period, China's maintenance has get over 5,000,000 tons involved, and caustic soda factories have a strong expectation for the price rise in the days to come. So they have a lot of goods in stock and control the supply of aluminum oxide. The smelting plant's capacity has been improved and the aluminum oxide price will keep the increasing trend as expected. In a situation where many restricting factors exist, the price of caustic soda will continue to increase, and caustic soda producers have been well-prepared for a long-term supply.

Author: Liwei Chu 
Copyright: iAbrasive.com--Abrasives & Diamond Tools Market

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