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China's bauxite mining issues to hit brown fused alumina - Asociación Nacional de Fabricantes de Productos Refractarios, Materiales y Servicios Afines



Jun 12

China’s bauxite mining issues to hit brown fused alumina

Brown fused alumina (BFA) prices were unchanged over the fortnight, but market sources warned that new bauxite mining restrictions in China could impact BFA production in the near-term. BFA operations remained intermittent due to the ongoing environmental inspections.

The new spate of environmental crackdowns on bauxite mining in China is set to reduce raw material supply for brown fused alumina production in the country, market participants told IM.

Key refractory-grade bauxite producing region Shanxi has announced new environmental measure on 4 May to restrict mining and smelting activities in the province, as part of the implementation of the «Soil Prevention Action Plan». Under the plan, any expansions in the non-ferrous smelting industry around residential, school, medical and retirement home areas will be prohibited.

Furthermore, there will be strict assessments on the environmental impact of a number of polluting industries, including non-ferrous metal mining and smelting, chemical, coking, electroplating, tanning, pesticides, lead-acid battery production and others. Applications for the above sectors will require evidence on the environmental impact on soil and on pollution control.

According to a number of Chinese and Europe-based suppliers, the majority of mining activities in Shanxi have stopped, while calcining and processing plants in nearby Tianjin were also impacted. Only a small number of bauxite production facilities that meet the required environmental standards are allowed to operate, two Chinese suppliers and two Europe-based distributor told IM.

Although the reduced bauxite supply has yet to impact brown fused alumina (BFA) production, one Europe-based distributor warned that less raw material will affect the sector, thus supporting prices.

Furthermore, ahead of the 13th National Games of China, due to be held in Tianjin and Luoyang, Henan in September, authorities have ramped up efforts to clean up the local environment. This will impact brown fused alumina production in Henan, suppliers in China and Europe said.

China is the biggest fused alumina producer globally, with Henan province being the main producing region. Output in the province has been intermittent since July 2016 due to the ongoing environmental inspections.
BFA spot prices were unchanged over the past two weeks but high-quality material from Tipping furnace was scarce, two traders said.

Spot prices for Chinese-origin refractory grade BFA remain at $550-600/tonne on a FOB China basis, compared to a fortnight ago, according to IM’s assessment on 4 May.

Lower-grade BFA (minimum 95% Al2O3 and maximum 1.2% silica) produced from fixed or Higgins furnace was offered at $550/tonne while the higher-grade material of 0.9% silica content produced from Tipping furnace would be more expensive, one Tianjin-based trader said.

«Tipping furnace material is not so easy to find; it requires cash payment,» the Tianjin-based trader said.
The Europe-based distributor warned: «If anybody has bought anything for less than $580/tonne since 1 April, they may not get delivery.»

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