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Thursday, 01 May 14
INDONESIA EXPORT BAN POINTS TO QUESTIONS OVER CHINA'S LONG-TERM BAUXITE SUPPLY - WOOD MACKENZIE
 China’s Bauxite demand forecast to reach 240 million tonnes by 2030
In light of the Indonesian mineral ore ban that came into force on January 12th 2014, Wood Mackenzie says the aluminium industry - particularly in China - faces a challenge to address a growing shortage of the raw material bauxite, an aluminium ore. It poses a compelling question for China - the world’s largest aluminium producer and consumer – with it's alumina refinery production forecast to rise by almost 17 million tonnes (Mt) by 2018 and a further 40Mt by 2030. Wood Mackenzie estimates China will need access to an additional 130Mt of bauxite over 2013 levels and expects China to consume as much as 240Mt of bauxite by 2030.
Until now Indonesia was the main supplier of bauxite to China, accounting for around 65% of overall supply in 2013. However, the mineral ore export ban that came into force in January this year, created a significant supply gap for China to fill. Wood Mackenzie believes the ban could be transformative to the global bauxite market in the longer term, but in the short to medium term the impact will be less significant due to swollen stockpiles and source diversification. Julian Kettle, Head of Metals and Mining Research for Wood Mackenzie explains: "China is the main global player in the aluminium market representing between 40% of supply and 60% of demand. Our most recent forecasts indicate that global alumina refinery production will rise to almost 140Mt by 2018, which means we'll see bauxite demand rise by almost 80Mt to 350Mt. With China's alumina demand set to increase so sharply, there will be huge implications for bauxite demand. We estimate China will need access to as much as 240Mt of bauxite by 2030 and as it only produced 72Mt domestically in 2013, huge uncertainty remains over the import versus domestic supply mix."
So where will China now source its bauxite from? Undoubtedly if Indonesia sticks to the ban in the longer term, China will have to look to alternative import sources or develop new mines domestically. However Wood Mackenzie suggests that China has in fact been making moves to diversify supply for some time in preparation for the ban. Carl Firman, Aluminium Analyst for Wood Mackenzie says: "In recent years we've seen China sourcing additional quantities of bauxite from a variety of other countries, most notably Australia and India - and while the alternative sources are not supplying huge volumes to China currently, in time they could do."
Wood Mackenzie believes that China has been actively increasing imports of bauxite since the mineral ore ban was first mooted in 2009. "This is a strategic move by China to ensure it can firstly meet the direct needs of the coastal aluminium refineries it's built up over the years, but secondly in preparation for the ban coming into force. We estimate that China has accumulated more than a year’s worth of bauxite supply. This works out at about 40Mt, or four-fifths of the entire volume of bauxite exported by Indonesia in 2013," Mr Firman adds.
Mr Kettle asserts: "Ultimately China's vast bauxite stock piles mean that in the short-term at least, there won't be any immediate impact on metal production. This strategic effort on China's part has ensured the breathing space required to either develop new bauxite mines domestically, or establish new sources of supply through imports."
Wood Mackenzie suggests one viable option that China is exploring is the utilisation of coal fly ash. "By investing in the development of new technology to extract alumina from the by-product (which occurs when burning coal for power generation) China could significantly reduce its bauxite requirement, but then again if it doesn't produce enough, it will still have to explore other options," Mr Kettle adds.
There are plenty of opportunities to develop bauxite production domestically and elsewhere in the world, and Wood Mackenzie suggests that three major basins in Guinea, Australia and Vietnam could more than meet China’s needs, but there are significant challenges to be overcome. Mr Firman cautions: "Is China going to put all of its eggs in three baskets – its history of diversifying supply would suggest otherwise."
"China does have options, but they come at a price. Developing new bauxite sources in other parts of the world will require significant investment as host governments don't just want mines - they want added value in the form of refineries and smelters. There are also the high cost hurdles of resource nationalisation, surrounding politics and developing infrastructure that China will have to negotiate in order to establish new trade routes. The big question is, will China look to these alternative sources and significantly increase imports or will it develop its own domestic resources to meet its insatiable demand? One thing that is for sure is that there are lots of opportunities for host governments open for China's business." Mr Firman offers in closing.
Editor’s notes:
Wood Mackenzie is a global leader in commercial intelligence for the energy, metals and mining industries. We provide objective analysis and advice on assets, companies and markets, giving clients the insights they need to make better strategic decisions. For more information visit: www.woodmac.com
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Friday, 02 August 24
COAL MARKET DEVELOPMENTS: FALLING PRICES AMID RECORD-HIGH OUTPUT - WORLD BANK
Coal prices inched up in May (m/m) following an 8 percent decline in 2024Q1. The Australian and South African benchmarks have plummeted more ...
Friday, 26 July 24
FUELEU MARITME IS COMING. IS YOUR CHARTERPARTY READY? - GARD
With less than six months to implementation of FuelEU Maritime in EU and EEA trades, there has been little published advice regarding how to alloca ...
Thursday, 04 July 24
INDIA'S COAL PRODUCTION RISES 14% IN JUNE - PTI
The country’s coal production rose by 14.49% to 84.63 million tonne (MT) in June. The country’s coal output was 73.92 MT in June last f ...
Tuesday, 02 July 24
NTPC CAPTIVE COAL OUTPUT GROWS 15% IN Q1; DESPATCH RISES 17%
State-owned NTPC on Monday reported a 15 per cent year-on-year increase in the production of coal from captives mines to 9.862 metric million tonne ...
Friday, 28 June 24
KOSPO INVITED BIDS FOR 400,000 MT OF MINIMUM 4000 NCV COAL FOR FIVE YEARS
Korea Southern Power Co., Ltd. (KOSPO), is inviting bids for total 400,000 MT of Low Calorific Value Coal for 5 years starting from July 2024 until ...
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- Asmin Koalindo Tuhup - Indonesia
- European Bulk Services B.V. - Netherlands
- Indian Oil Corporation Limited
- Barasentosa Lestari - Indonesia
- Anglo American - United Kingdom
- Madhucon Powers Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Petron Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Kepco SPC Power Corporation, Philippines
- Carbofer General Trading SA - India
- Pendopo Energi Batubara - Indonesia
- Interocean Group of Companies - India
- The University of Queensland
- Indika Energy - Indonesia
- International Coal Ventures Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Medco Energi Mining Internasional
- Bangladesh Power Developement Board
- Kaltim Prima Coal - Indonesia
- Indonesian Coal Mining Association
- Planning Commission, India
- IHS Mccloskey Coal Group - USA
- Bank of Tokyo Mitsubishi UFJ Ltd
- PTC India Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Banpu Public Company Limited - Thailand
- Mercuria Energy - Indonesia
- Essar Steel Hazira Ltd - India
- SMG Consultants - Indonesia
- MS Steel International - UAE
- Electricity Authority, New Zealand
- Star Paper Mills Limited - India
- Samtan Co., Ltd - South Korea
- GN Power Mariveles Coal Plant, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Trasteel International SA, Italy
- Semirara Mining Corp, Philippines
- Jaiprakash Power Ventures ltd
- Globalindo Alam Lestari - Indonesia
- Sarangani Energy Corporation, Philippines
- GVK Power & Infra Limited - India
- Heidelberg Cement - Germany
- Ministry of Finance - Indonesia
- PNOC Exploration Corporation - Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Maharashtra Electricity Regulatory Commission - India
- Sical Logistics Limited - India
- OPG Power Generation Pvt Ltd - India
- Meralco Power Generation, Philippines
- Edison Trading Spa - Italy
- Global Business Power Corporation, Philippines
- Ambuja Cements Ltd - India
- Agrawal Coal Company - India
- Goldman Sachs - Singapore
- Bhatia International Limited - India
- Renaissance Capital - South Africa
- Rio Tinto Coal - Australia
- Bhoruka Overseas - Indonesia
- Savvy Resources Ltd - HongKong
- Tamil Nadu electricity Board
- Minerals Council of Australia
- Georgia Ports Authority, United States
- Lanco Infratech Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- SMC Global Power, Philippines
- Kalimantan Lumbung Energi - Indonesia
- White Energy Company Limited
- Coal and Oil Company - UAE
- Energy Link Ltd, New Zealand
- Sinarmas Energy and Mining - Indonesia
- Binh Thuan Hamico - Vietnam
- Romanian Commodities Exchange
- Chamber of Mines of South Africa
- Coastal Gujarat Power Limited - India
- Altura Mining Limited, Indonesia
- The State Trading Corporation of India Ltd
- Alfred C Toepfer International GmbH - Germany
- Commonwealth Bank - Australia
- Malabar Cements Ltd - India
- Thiess Contractors Indonesia
- Rashtriya Ispat Nigam Limited - India
- Sakthi Sugars Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Central Java Power - Indonesia
- Power Finance Corporation Ltd., India
- The Treasury - Australian Government
- Maheswari Brothers Coal Limited - India
- Kapuas Tunggal Persada - Indonesia
- Orica Mining Services - Indonesia
- Economic Council, Georgia
- Global Green Power PLC Corporation, Philippines
- Deloitte Consulting - India
- Manunggal Multi Energi - Indonesia
- Energy Development Corp, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Wood Mackenzie - Singapore
- Orica Australia Pty. Ltd.
- TeaM Sual Corporation - Philippines
- Toyota Tsusho Corporation, Japan
- Bahari Cakrawala Sebuku - Indonesia
- Kideco Jaya Agung - Indonesia
- Wilmar Investment Holdings
- ASAPP Information Group - India
- Directorate Of Revenue Intelligence - India
- Siam City Cement PLC, Thailand
- Jindal Steel & Power Ltd - India
- Makarim & Taira - Indonesia
- Baramulti Group, Indonesia
- Central Electricity Authority - India
- Sree Jayajothi Cements Limited - India
- Tata Chemicals Ltd - India
- GMR Energy Limited - India
- Global Coal Blending Company Limited - Australia
- Uttam Galva Steels Limited - India
- Mjunction Services Limited - India
- Simpson Spence & Young - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Ind-Barath Power Infra Limited - India
- India Bulls Power Limited - India
- Australian Coal Association
- VISA Power Limited - India
- Bukit Makmur.PT - Indonesia
- Bhushan Steel Limited - India
- Leighton Contractors Pty Ltd - Australia
- Borneo Indobara - Indonesia
- Thai Mozambique Logistica
- Petrochimia International Co. Ltd.- Taiwan
- GAC Shipping (India) Pvt Ltd
- South Luzon Thermal Energy Corporation
- Neyveli Lignite Corporation Ltd, - India
- Meenaskhi Energy Private Limited - India
- Salva Resources Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Riau Bara Harum - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Therma Luzon, Inc, Philippines
- Videocon Industries ltd - India
- Marubeni Corporation - India
- Bulk Trading Sa - Switzerland
- Africa Commodities Group - South Africa
- Eastern Energy - Thailand
- Chettinad Cement Corporation Ltd - India
- Aboitiz Power Corporation - Philippines
- Aditya Birla Group - India
- Posco Energy - South Korea
- Indian Energy Exchange, India
- Holcim Trading Pte Ltd - Singapore
- Bharathi Cement Corporation - India
- Antam Resourcindo - Indonesia
- McConnell Dowell - Australia
- Port Waratah Coal Services - Australia
- Gujarat Electricity Regulatory Commission - India
- PowerSource Philippines DevCo
- Mintek Dendrill Indonesia
- Grasim Industreis Ltd - India
- Formosa Plastics Group - Taiwan
- Independent Power Producers Association of India
- Australian Commodity Traders Exchange
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Attock Cement Pakistan Limited
- Krishnapatnam Port Company Ltd. - India
- CIMB Investment Bank - Malaysia
- Dalmia Cement Bharat India
- Ministry of Mines - Canada
- Larsen & Toubro Limited - India
- Xindia Steels Limited - India
- Gujarat Mineral Development Corp Ltd - India
- SN Aboitiz Power Inc, Philippines
- Latin American Coal - Colombia
- CNBM International Corporation - China
- Metalloyd Limited - United Kingdom
- Timah Investasi Mineral - Indoneisa
- Cement Manufacturers Association - India
- Straits Asia Resources Limited - Singapore
- Bayan Resources Tbk. - Indonesia
- Gujarat Sidhee Cement - India
- Karaikal Port Pvt Ltd - India
- Siam City Cement - Thailand
- Price Waterhouse Coopers - Russia
- AsiaOL BioFuels Corp., Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Intertek Mineral Services - Indonesia
- Sojitz Corporation - Japan
- Merrill Lynch Commodities Europe
- Kumho Petrochemical, South Korea
- Vedanta Resources Plc - India
- Sindya Power Generating Company Private Ltd
- Mercator Lines Limited - India
- Parliament of New Zealand
- Oldendorff Carriers - Singapore
- IEA Clean Coal Centre - UK
- ICICI Bank Limited - India
- Karbindo Abesyapradhi - Indoneisa
- TNB Fuel Sdn Bhd - Malaysia
- Parry Sugars Refinery, India
- New Zealand Coal & Carbon
- Billiton Holdings Pty Ltd - Australia
- Electricity Generating Authority of Thailand
- Indo Tambangraya Megah - Indonesia
- Coalindo Energy - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- London Commodity Brokers - England
- Kartika Selabumi Mining - Indonesia
- Standard Chartered Bank - UAE
- Singapore Mercantile Exchange
- Vizag Seaport Private Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indogreen Group - Indonesia
- Kobexindo Tractors - Indoneisa
- Ministry of Transport, Egypt
- Miang Besar Coal Terminal - Indonesia
- San Jose City I Power Corp, Philippines
- LBH Netherlands Bv - Netherlands
- Kohat Cement Company Ltd. - Pakistan
- Eastern Coal Council - USA
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