CBIX up, Alumina up, Chalco moves on Guinea

CBIX climbed 2.6% (US$1.2/dmt) to US$46.3/dmt on the back of higher ViU-priced Brazilian material. After the slight rise last week, Malaysian prices held, with unwashed material at US$27.5/dmt FOB and washed material at US$39.5/dmt FOB.

The pace is quickening (if that’s possible) in Guinea, with Chalco and the Government of Guinea signing an agreement on the 31st October relating to bauxite mining on tenement bloc 131 (part of old BHPB tenements). Under the terms of the agreement, Chalco is to complete a feasibility study into a new bauxite mine on the bloc within six months. This is the latest success for a Chinese company in the race to secure and develop Guinea’s rich bauxite resources. The Weiqiao backed SMB-WAP partnership has led the charge, with the development of a dual 30 MTPY barge loading facility and mine. Other Chinese companies are also pursuing bauxite tenements.

Chinese alumina prices increased again, with the north up 3.8% (RMB98/t) to RMB2,673/t and the south up 4.0% (RMB100/t) to RMB2,600/t, with alumina supply and delivery remaining tight. Transport to Xinjiang province has reportedly improved, however it remains tight in Shanxi and Henan. Northern buyers have been heading south, where transport and spot alumina is more readily available, which explains the recent strong price performance in southern regions. With Chinese buyers already active in foreign markets, this latest Chinese price increase is likely to support current ROW prices.

Despite a drop in bunker (fuel) prices, a lift in capesize timecharter rates increased the Guinea-Shandong capesize freight rate by 2.6% (US$0.3/wmt) to US$11.7/wmt. Panamax timecharter rates eased which, combined with the lower bunker prices, dropped the North Australia-Shandong panamax freight rate by 4.7% (US$0.3/wmt) to US$5.5/wmt.

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