Market Analysis of Bauxite in September 2016

In September, the ex-factory prices without tax of 85 rotary kiln bauxite are around 1300-1370 yuan/ton, and 88 rotary kiln bauxite around 1380-1600 yuan/ton. But it rises slightly this month.

It is reported that the rising prices of rotary kiln bauxite are mainly influenced by two factors. Firstly, the raw ore is in short supply, and high grade ore is harder to find, so enterprises have to purchase raw ore at a high price for stable production run. Some enterprises expressed that the price of raw ore has increased by 60 yuan/ton or so at present, and the production costs are increased significantly. But for enterprises that have their own mining can temporarily ignore this factor;

Secondly, affected by environmental policy, enterprises have to use clean energy for production in the long-term development, and they use natural gas instead of coal as fuel. But the fuel cost of one ton of rotary kiln bauxite will rise from 300 yuan to 350 yuan, which increases enterprises’ cost pressure.

Part of enterprises have increased the price about 50 yuan/ton, but it is not passed on to purchasers completely, and each takes fifty percent; There are also some enterprises that are still in wait-and-see, more afraid of the gloomy market. If the price continues to rise, it will bring adverse consequences.

Through analysis, although rotary kiln bauxite is raised firstly in price, but the shortage of raw ore causes the rising prices, which really is a universal problem in the industry, and other types of alumina are likely to rise in the future.