Bauxite prices seeking direction

CBIX eased marginally over the week, down 0.7 per cent (US$0.3) to US$45.1/dmt, with ViU-adjusted prices showing some convergence. Malaysian cargos are beginning to re-enter the market, with prices unchanged at US$25-26/dmt FOB for unwashed material (US$29.4/dmt on a ViU-adjusted basis) and US$37/dmt FOB for washed material. Cargos from Australia averaged US$44.6/dmt over the week on a ViU-adjusted basis.

Chinese alumina prices are also treading water, with the North China domestic alumina price unchanged at RMB1,952/t (US$297/t including VAT) and the south down 0.5 per cent (RMB10/t) to RMB1,855/t (US$282/t including VAT). With restarts of around 5 MTPY already this year, China’s domestic alumina supply demand balance seems to have been re-established, at least in the short term. From here, any significant increases in alumina prices are likely to see more capacity come back on-stream, resulting in a proportional increase in demand for bauxite.

Bunker prices edged higher over the week, although Panamax charter rates fell, leading to a net fall in Panamax freight rates. In contrast, Capesize freight rates lifted, due to the fuel price increase combining with increased charter rates.

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