ABx is selling into the strengthening cement & fertiliser markets until Chinese demand recoversSydney, May 29, 2017 AEST (ABN Newswire) - Current trends in the metallurgical grade Chinese markets are encouraging (see the link below) and Australian Bauxite Ltd (ASX:ABX) is beginning to engage with potential customer refineries - but current prices still need to rise a bit yet.
In the meantime, ABx will grow its bauxite business by supplying cement-grade bauxite for making high-strength cement and supplying fertiliser-grade bauxite for making superphosphate fertiliser. As demand for stronger, low alkali cement increases for infrastructure construction (especially in the USA), demand should increase for cement-grade bauxite of the type marketed by ABx. ABx bauxite is exceptionally low in alkali salts and is quartz-free.
Infrastructure construction markets
ABx may sell more cement-grade bauxite because of the proposed increase in infrastructure construction that is being proposed by the new US administration. ABx bauxite is suitable for all infrastructure construction, be it bridges, tunnels or roads.
ABx's low-sodium, low alkali cement-grade bauxite supplies the right forms of Al2O3, Fe2O3 and SiO2 in the correct ratio to increase the production rate of extra-strong, corrosion-resistant Portland cement, by stopping kiln blockages, reduces fuel consumption and saves wear and tear on the kiln refractory brick linings.
Several North American cement-grade bauxite customers are reporting bullish outlooks for high-strength cement as the new American administration embarks on a major rebuilding of the USA's infrastructure. ABx will be a beneficiary should this promise become reality. The demand for fertiliser also continues to grow.
Validation feedback: The performance of ABx cement-grade bauxite through the kilns and resulting cement products have been exemplary. "ABx bauxite is the best favour you can do for yourself and your cement plant".
Metallurgical Grade Bauxite Market (for aluminium production) SIGNS OF RECOVERY?
Metallurgical-bauxite prices fell in 2015-16, steadied in late 2016, showed weak signs of improvement in early 2017 and have risen recently, especially since the Guinean government announced its intention to curb bauxite exports to encourage more alumina refining in Guinea, just as Indonesia did in 2010-14. However, this price increase could just be due to a seasonal increase in higher-priced bauxite from Guinea and a seasonal reduction in lower-priced Australian bauxite. Some reports suggest that price increases from some countries are due to tax rule changes.
The following Figure 3 (see the link below) overleaf showing prices by country supports the "seasonal variation" explanation:
Other than slight rises in average bauxite prices for Indian bauxite and Malaysian bauxite (both similar to ABx's bauxite), bauxite prices have been flat, but the quantity from Guinea has grown strongly (doubling in the last 6 months to 2.336 million tonnes in May'17) whilst lower-priced tonnes from Australia have fallen by 30%.
The Chinese metallurgical bauxite market was severely disrupted in 2015 & 2016 by oversupply from Malaysia, Guinea and Australia when Chinese demand was weakening. Demand is catching up, prices have stabilised and are expected to improve in 2018. ABx will sell metallurgical bauxite when prices and demand are attractive.
The CBIX leading price indicator (see Figure 6 in the link below) shows a rising average bauxite price in April and May 2017 but this could be seasonal as tonnages of higher-priced bauxite supply increases?
Prices for metallurgical bauxite remain unattractive to build new mines dedicated to only supplying Chinese alumina refineries. This is why ABx continues to develop its cement markets for cement-grade bauxite and to diversify its range of customers.
To view tables and figures, please visit:
About Australian Bauxite Ltd
Australian Bauxite Limited (ABx) (ASX:ABX) has started its first bauxite mine in Tasmania and holds the core of the Eastern Australian Bauxite Province. ABx's 37 bauxite tenements in Queensland, New South Wales and Tasmania exceed 5,000 km2 and were rigorously selected for (1) good quality bauxite; (2) near infrastructure connected to export ports; and (3) free of socio-environmental constraints. All tenements are 100% owned, unencumbered & free of third-party royalties.
ABx's discovery rate is increasing as knowledge, technology and expertise grows.
The Company's bauxite is high quality gibbsite trihydrate (THA) bauxite and can be processed into alumina at low temperature.
ABx has declared large Mineral Resources at Inverell and Guyra in northern NSW, Taralga in southern NSW, Binjour in central QLD and in Tasmania confirming that ABx has discovered significant bauxite deposits including some of outstandingly high quality.
In Tasmania, at Bald Hill, the Company's first bauxite mine commenced operations on schedule on 9 December 2014 – the first new Australian bauxite mine for more than 35 years.
ABx aspires to identify large bauxite resources in the Eastern Australian Bauxite Province, which is emerging as a globally significant bauxite province. ABx has created significant bauxite developments in 3 states - Queensland, New South Wales and Tasmania. Its bauxite deposits are favourably located for direct shipping of bauxite to both local and export customers.
ABx endorses best practices on agricultural land, strives to leave land and environment better than we find it. We only operate where welcomed.
Australian Bauxite Ltd