For the Quarter Ending December 2022
Bauxite prices in the North American market rose in the fourth quarter of 2022, despite weak economic conditions and lower inventory levels. Participants reported a significant increase in buying interest in October, despite the fact that there is still a plentiful supply of units available on the spot market. According to market participants, the market is slowing down after weeks of negativity and premiums dropping. Buyers are eager to acquire additional tonnages. Participants stated that buying interest in both spot and first-quarter contracts had increased in the latter half of the week. Manufacturers have seen some consumers return to the market, picking up some spot tonnages after a period of inactivity. Participants had differing views about the future, with some noting that premiums had reached a floor and that consumers were beginning to release first-quarter tenders. Others, however, believe that falling freight rates and high overall availability of units kept premiums under pressure. There were still a lot of units available at the end of Q4 and uncertainty about long-term demand.
Bauxite prices in the Chinese market showed a mixed demand outlook in the fourth quarter of 2022, owing to the fluctuating demand outlook amidst COVID prevention and control measures. According to market participants, Bauxite prices fell sharply with the arrival of Q4. Global physical delivery premiums continued to plunge from their highs earlier this year. Chinese output had significantly increased global supply. Chinese citizens began protesting the ongoing "zero-COVID" policies in November. The possibility of a complete ban on Russian metal within the US and the LME had increased uncertainty about the direction of the Bauxite price index; this rally lasted until December. At the same time, the Chinese government was under pressure to relax COVID restrictions due to ongoing protests. Bauxite prices reacted as expected. Spot trading interest in the Chinese domestic alumina market increased at the end of the fourth quarter owing to winter stockpiling activity, pandemic-related transportation restrictions, and air pollution warnings during the winter season. Pandemic-related transportation restrictions had also widened the delivery cost gap between Shanxi and Henan to northwest smelters, resulting in significant price arbitrage between the two origins on a delivered basis.
Near the end of 2022, Bauxite prices increased in the European market despite low consumer demand and a dismal economic environment. According to market participants, following a strong first half of 2022, demand fell in the face of an increasingly bleak outlook for the manufacturing industry. In Europe, there was widespread concern that manufacturing activity would plummet in October. Most players had not yet felt the effects of massive power cost increases, but they did in November when no one offered fixed power contracts. Even if spot prices fell further in the short term, manufacturers faced significant price increases for their power needs. Weaker consumer demand has caused European Bauxite prices to fall sharply from record highs earlier this year, which peaked due to concerns about material availability in Europe amid high freight rates and port congestion. Many businesses found themselves in a fast-paced environment with no orders, high costs, and declining margins. Consumers were delaying and postponing deliveries across the market, including in Europe, Asia, and the United States. Rising inflation had increased financing and credit costs while decreasing purchasing power.
For the Quarter Ending September 2022
Due to consistent demand from the Aluminium sector, Bauxite prices in North America increased throughout the third Quarter of 2022. At the termination of Q3 of 2022, the local market had limited supply and strong demand because of port congestion at the container terminals of the US west coast and high inflationary costs pressure on the commodity market amid a rise in the upstream energy values. The prices were also impacted by the increasing demand from the downstream industries, including metallurgy and chemical industries. Meanwhile, traders indulged in making sales at high-profit margins by passing the cost burden to the customers in the domestic market.
The Bauxite prices showed an upward trend with increased downstream demand during the third Quarter of 2022. The commodity prices on the spot market rose with Aluminium production in the APAC region. The Indonesian government will stop the Bauxite cargo movement at the end of 2022, pushing downstream industries to stockpile inventories. In addition, commodity cargo was restricted due to several market disruptions amid Chinese Covid lockdown restrictions and port congestion due to wage disputes among the workers in this Quarter. The downstream industries were also purchasing, and traders remained resolute in their offers. The ban on alumina in Indonesia and the search for suppliers by alumina mills in Guinea and Australia will affect the commodity prices and drive up the cost of Aluminium, impacting Bauxite prices.
Supply uncertainties backed by the geopolitical conflict and disrupted trade routes amongst the European countries, the price of Bauxite in Europe surged throughout the third Quarter of 2022. The volatile demand from the Aluminium industry during the third Quarter of 2022 majorly impacted the commodity prices this Quarter. The supply and demand gap widened in the third Quarter of this year because of the high inflationary input costs pressure and the labor strike at the UK and German ports. Due to the Indonesian government's export prohibition on Bauxite, which affected the pricing dynamics of the product globally, prices continued to rise in the second half of Q3. The major market players faced tight supply and global inflationary pressure in the Quarter ending September 2022.
For the Quarter Ending June 2022
Due to opposing market sentiments, bauxite prices in North America varied throughout the second quarter of 2022. In the first half of Q2 of 2022, the local market had restricted supply and strong demand because of the tumultuous year that followed the invasion of Russia and Ukraine. Prices stabilized because of some product price stability in the second part of the quarter. Prices fell because of the trending decline in offtakes. The prices were changing as a result of the evolving market sentiments. Prices were shifting as a result of conflicting market sentiment. The prices are still upward due to increasing demand from the downstream industries, including metallurgy and chemical industries.
With increased demand from end-use industries, such as Indonesia banning bauxite export this year, the price of Bauxite has been rising in North America throughout the second quarter of 2022. This has also driven up the price. Prices on the spot market rose from the previous trading day in the first half of Q2. Bauxite and tin exports will be prohibited by the Indonesian government starting in 2022, pushing downstream businesses to offer the most value to the nation. Aluminum prices ran well in the second trading session of Q2's second half. The downstream industries were also purchasing, and traders remained steadfast in their bids. In addition, if Indonesia's legislation is formally enforced, China will buy Bauxite from Indonesia Alumina factories will hunt for new sources from other nations, such as Guinea and Australia. The embargo on alumina in Indonesia and the search for suppliers by alumina mills in Guinea and Australia will directly influence prices and drive up the cost of aluminum.
Supply disruptions backed by the Russia-Ukraine conflict, the price of Bauxite in Europe surged throughout the second quarter of 2022. The worldwide alumina market is anticipated to be volatile and unclear during the first half of Q2. Supply and demand fundamentals may be tipped in the second half of this year because of the Russia-Ukraine war and the convergence of associated events. Due to the Indonesian government's export prohibition on Bauxite, which raised the price of the commodity globally, prices continued to rise in the second part of Q2. The major exporter was facing tight supply and global inflationary pressure.