The major Chinese calcined bauxite producer will start operations at its newly constructed calcination plant in Guizhou in Q4. Although there is widespread environmental restriction on production, CMP has received all the governmental permits to continue production in both Guizhou and Tianjin.

Calcined bauxite producer China Mineral Processing (CMP) will be starting commercial production in its new plant in Guizhou, South West China in November.

The newly constructed 80,000tpa calcination facility with rotary kiln and pressurized shaft will start operation in end of October, producing rotary bauxite lump between 85-90% Al2O3.

The monthly output is expected at 8,000-10,000 tonnes/month in the longer-term, according to CMP.
«This is now certain and we have all the permits required plus we are unrestricted in production in the 4th quarter 2017 – for calcinations of our own mine produced bauxite,» James Devlin, managing director of CMP Europe sales, told IM.

CMP has a bauxite mine with estimated reserves of 3m tonnes in Xiuwen, north of Guiyang, and the mine will be supplying the calcination plant with raw material. The mine has been in production since June 2012.
In addition, the company also has a supply contract with Aluminium Corp of China Ltd (Chalco) Guizhou, which would provide them with additional bauxite raw material.

Due to the draconian anti-pollution measures enforced by the central Chinese government, mining and industrial activities in provinces around Beijing will be greatly restricted from 1 October onwards.

CMP expects production in Guizhou to be greatly reduced in October due to the ban on explosives use but operations should return to normal between November and March 2018. This is because unlike Shanxi, Guizhou is far away from any big city and is located more than 2,000km away from Beijing, hence the province is subjected to less scrutiny compared to Shanxi.

Bauxite lump produced in Guizhou will be exported from South China ports, or transported in bulk to CMP’s crushing plant in Tianjin in late December or January 2018 for processing into sized refractory material.
Although CMP’s crushing plant in Tianjin has received environmental permission to work continuously through November – March 2018, the facility could run out of raw material to crush after 15 November due to a shortage of bauxite.

«Work in CMP Tianjin could to be interrupted because of the shortage of bauxite (dynamite and mining restrictions) in October and because of environmental closures of the calcinations plants in Shanxi after 15 November,» Devlin said .

Due to the scarcity of bauxite in the market, demand for the refractory minerals remains very strong.
«We already got the first two containers in September 2017 for testing in Europe,» Devlin said.
To date 3,000 tonnes of bauxite lump and 6,000 tonnes of crushed material have also been sold to different clients for delivery in December-January 2018, according to delivery.

Brown fused alumina prices in China reached a 1.5-year high this week. The ongoing anti-pollution checks continue to cap production in Henan while scrutiny on export documents is ridding the market of lower offers.

Chinese brown fused alumina spot prices hit a 1.5-year high over the past two weeks as widespread environmental inspections continue to push prices upwards.

Environmental inspectors have moved into Henan province – the main fused alumina producing region in China – since mid-July, and many facilities were compelled to close while the inspections took place.

Randomised anti-pollution checks have been conducted at plants in various parts of the province, which reduced total fused alumina output in the region, at least three local producers told IM.

China is one of the largest fused alumina producers globally and the output cut will impact exports to international refractories and abrasive end markets.

Due to the ongoing production outage, brown fused alumina (BFA) prices have rocketed over the past fortnight, continuing the uptrend that was first identified on 13 July.

«It’s like a roller-coaster: [prices are] rising every two days,» said one Henan-based producer on the price volatility.

Refractory-grade brown fused alumina (BFA) (95% Al2O3 min, 0-6mm) spot prices jumped by an average of $65/tonne to $700-750/tonne FOB China, up from $620-700/tonne a fortnight ago, according to IM’s assessments on 24 August.

Offers for BFA produced from fixed furnace start at the lower end of the range, close to $700, while premium material from tipping or Higgins furnace is priced at the higher-end.

Abrasive-grade material (95% Al2O3 min, Fepa F8-220 Grit) also rose to $780-825/tonne FOB China, up from $730-780/tonne.

Supply of certain grit sizes will continue to be limited due reduced capacity and drawn down inventory, two Henan-based producers said.

«Every little we produce gets taken straightaway. Inventory is zero,» said the first Henan producer.
The producer and another Europe-based distributor have expressed concern about the ability to fulfill supply contracts in the coming months amid the great supply uncertainty.

In contrast, due to sufficient raw material alumina supply, white fused alumina prices remained stable as production was not as badly impacted.

Refractory-grade white fused alumina (99.0% Al2O3 min, in 25kg bags) prices have remained unchanged since 6 April at €700-750/tonne ($820-878/tonne) CIF Europe.

Two Henan-based producers lamented that the higher prices were a direct effect of rising raw material cost, and did not contribute to higher profit margins.

Raw material bottleneck, VAT scrutiny

To further compound supply issue, the prices of graphite electrode, a key component in the kiln for the production of fused alumina, have spiked in recent months.

According to one Chinese producers on 24 August, graphite electrode prices have increased to above Chinese Renminbi (Rmb) 60,000/tonne ($9,003/tonne), up from Rmb 50,000 ($7,502/tonne) in end-July. Note: IM does not track or publish prices of graphite electrode.

Fused alumina producers estimate around 2-23kg of graphite electrode is used to produce every tonne of fused alumina, and the price spike has further supported upticks in this market.

The supply of locally mined high-grade bauxite ore remained restricted, which has further impacted fused alumina production.

Meanwhile, intense scrutiny on export documents by China customs has discouraged any offers that do not include the 17% value-added tax (VAT), a second Henan producer said.

«Now nobody dare go through Hong Kong; it’s too risky,» said the producer.

Buyers could avoid paying the 17% VAT when they route payment through off-shore accounts held in Hong Kong or Shenzhen, hence some sellers often conduct business through this method.

Tax evasion on minerals exports is widely acknowledged as being common in China. Such practices have existed for many years and, although illegal, they were often overlooked by authorities, before the latest crackdown on tax dodgers.

Fine particles play a major role not only in the flowing characteristics of castables but also in the final properties of the castable in application. To optimise the particle packing of the castable, different kinds of fine aluminas can be used to form the matrix: calcined, semi-reactive, monomodal reactive or multimodal reactive aluminas.

The UK produces 1 million tonnes per year of kaolin, a raw material of ceramics, which a cross-sector interest group hopes to protect with EU-derived anti-dumping duties following the UK’s exit from the European Union.

The UK ceramics industry is lobbying the UK government to ensure that anti-dumping duties for China based on existing EU rules stay in place post-Brexit to protect the supply chain and preserve jobs.

Tableware and tiles had been most affected among the ceramics industry by cheap Chinese imports until the EU applied a tariff of 13.1-36.1% on those products, which came into force on May 14, 2013.

Kaolin is one of the raw materials in the ceramics production stream, and the UK produces 1 million tpy of the mineral, according to the United States Geological Survey.

Industrial Minerals priced kaolin at $231-241 per tonne for tableware(-45 micron, FCL’s bagged>90 whiteness, fob HaiPhong, Vietnam) on February 13, flat from the previous month.

With the UK set to leave the EU, such EU-enforced protections will cease to apply in the UK on March 29, 2019,  unless a transitional period is agreed with the remaining 27-member bloc.

«At present UK ceramic manufacturers and their supply chain benefit from two EU anti-dumping measures covering imports of tiles and tableware from China. The anti-dumping duties provide our members with a level playing field with state-supported Chinese competitors,» the British Ceramics Confederation (BCC), a trade interest group, which is lobbying on behalf of all sectors of the UK ceramics industry, told Industrial Minerals.

«The bills currently before Parliament need to [be amended to] enable similar UK measures, but at the moment they fall short. This isn’t about protectionism, it’s about restoring a competitive environment when some countries break the rules,» the BCC added.

The Taxation (Cross-Border Trade) Bill, first brought before parliament on November 20, 2017, proposes an economic interest test and public interest test should be used to calculate the damage to sales and jobs and will be imposed by a newly-created Trade Remedies Authority (TRA).

The TRA would be in charge of implementing any trade remedies or anti-dumping duties, while the two tests are deemed to be too vaguely outlined in the bill and therefore insufficient to protect UK producers from dumped products.

The European Ceramic Industry Association and European Federation for Ceramic Table- and Ornamentalware claim Chinese imports have caused the loss of 10,000 jobs among EU producers between 2008-2013 and reduced output, allowing Chinese control of the industry.

The UK ceramics industry currently creates an annual $2 billion turnover, and $500 million of exports.

Should China flood the UK market with cheaply-made ceramics products, Chinese products could then hold a monopoly on the market.

Those given market economy status (MES) by the World Trade Organisation are exempt from anti-dumping duties, whereas non-MES countries can have their products subject to tariffs.

China has not yet been given MES, but is lobbying to achieve this.

Countries such China and Vietnam, where the state exerts a lot of influence in the domestic economy by providing subsidies, for instance, create artificially-low prices on products in countries where they are exported.