Bauxite shipments arriving in China hit new record levels in the first quarter of 2022 and grew at an average annual rate of 12.8% between 2017 and 2021, significantly outpacing all other commodities which combined grew at an average of just 4.3% per year. So far in 2022, the appetite for bauxite imports has remained high and the price of aluminium has reached its highest level in 14 years.

The Russia-Ukraine war has caused aluminium prices to surpass USD 3,000/tonne for the first time since 2008, which is expected to lead to an increase in domestic aluminium production.

“In the first quarter of 2022, China’s bauxite imports hit record levels, increasing 15.4% y/y. This is in stark contrast to China’s total bulk imports which, excluding bauxite, dropped by 10.5% y/y,” says Niels Rasmussen, Chief Shipping Analyst at BIMCO.

Compared to the last quarter of 2021 bauxite arrivals increased 13.6% and particularly shipments from Guinea drove the increase as they contributed 57% of overall volumes.

“Despite being named for the Guinean port, Kamsarmaxes play only a very small role in the Guinea-China shipments and Capesizes are the main beneficiary of China’s demand for the commodity, carrying a little more than 70% of all volumes,” says Rasmussen.

In the long run, the aluminium supply chain may alter once again, as Guinea’s interim government has challenged international companies mining in the country. The military junta has demanded mining companies to present investment plans for alumina refining plants by May 2022.

“If the government succeeds in establishing large alumina refineries in Guinea, bulk shipping patterns will change. It takes four tonnes of bauxite to produce one tonne of alumina, which would cause a decline in the number of shipments between Guinea and China,” says Rasmussen.

Marex Media