Development Situation Analysis on Bauxite Import Market in China

China’s bauxite reserves account for only 2.8% of the world's reserves, but the aluminum processing capacity has reached the world’s 53%. Bauxite resources in China has become increasingly scarce, and resources reserves have been declining, so the supply contradictions of high alumina rich ore are increasingly prominent. We can see that bauxite resources have restricted the development of aluminum processing industry.

From bauxite import history of the last ten years in China, we can learn that since 2006, China’s demand for imports of bauxite has reached around 10 million tons. Affected by the financial crisis in 2009, alumina manufacturers reduced the production, which leads to the weakening demand of importing bauxite. In January 2014, Indonesia stopped to export bauxite. In 2015, China's importing bauxite from Malaysia soared, leading to the China's bauxite imports return to more than 50 million tons, and Malaysia exceeded Australia becoming China's largest bauxite supplier.

Pahang is the third largest state in Malaysia and also an important bauxite production state, whose capital- Kuantan’s mining activities obtain rapid development in the past two years, in order to satisfy the demands of their top aluminum producer - China. But crazy mining leads to public outcry, and a lot of people complain about water pollution and environmental damage. On January 15, Malaysia carried out a ban, banning all bauxite mining activities and freezing new export license for three months. Currently, the ban has extended to July, and the policy is unclear until now.

China is the world's second largest producer of bauxite, whose annual output is about 47 million tons, but the ore quality is poor, and the development and smelting are difficult, which are not conducive to the alumina production, and also lead to long-term dependence on imports. Australia is the world's largest producer of bauxite, whose annual output is about 81 million tons. A tightening global supply, and China's strong growth in market demand, are pushing for bauxite prices rise. There is no doubt that the Chinese market demand for high quality bauxite is rising rapidly. As the limit of Indonesia and Malaysia, Chinese smelters are looking more into Australia that has abundant bauxite and unique quality advantages.