China's anti-smog regulation to impact bauxite supply chain; Jan bauxite import drops 11.7% YoY

Bauxite import in China is on a decline. The country, which leads the world's largest bauxite consuming countries, courtesy its ever-expanding domestic aluminium industry, witnessed a early-year slump in the ore import after its government came down heavily on its smelters and refineries in order to curb pollution. China imported 4,594,952 tonnes of bauxite in January this year, down 11.74 per cent from the corresponding period previous year.

China's anti-smog regulation to impact bauxite supply chain; Jan bauxite import drops 11.7% YoY

A year-on-year study of the bauxite import trend in China will reveal a gradual increase which is supported by the fact that the country's aluminium output has also risen significantly over the same period. In 2015, the Asian country imported 56.01 million tonnes of bauxite which climbed by 13.9 per cent to reach 63.8 million tonnes in 2016. In 2017, till October, China is estimated to purchase around 64 million tonnes of the aluminium ore from the global sellers, up 22.39 per cent from the corresponding period previous year.

Bauxite import cost in China has diverged from the volume of import. In 2015, total bauxite import in the country totalled US$2.94 billion, which came down at US$2.21 billion in 2016. In 2017, till October, the value of bauxite import in China is estimated to reach US$1.88 billion, further down by 1.39 per cent from the same period previous year.

China imported 2,140,395 tonnes of bauxite (+78.14 per cent year-on-year) from Australia, 1,642,168 tonnes from Guinea, 328,576 tonnes (+94.09 per cent YOY) from Brazil, 188,476 tonnes (-90.9 per cent YOY) from Malaysia, 50,952 tonnes (-95.4 per cent YOY) from India, and 28,391 tonnes (-65.65 per cent YOY) from Republic of Ghana in January 2017.

China's "Air Pollution Control" regulation which was formally approved on February 20 this year and came into effect last Wednesday, March 1, is all set to redefine entire aluminium industry supply chain system of the country. It is not just the aluminium smelters that stand to be affected but also the refineries in Shandong which rely heavily on imported bauxite. The ripple effect is predicted to be felt by the players up in the value chain, and that includes bauxite suppliers in Australia, India and Guinea.

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