Mar. 05, 2019 – Local government in Sanmenxia, Zhengzhou, Henan Province, one of the main industrial districts for white fused alumina, brown fused alumina and other corundum minerals, announced a new round of production capacity restriction actions starting from 1st, March, lasting for 60 days.

During this period, peak hour production restriction would be the main action that is expected to be implemented uninterruptedly, and electric power control will be taken as the measure so as to make sure production restriction conducted. Besides, overall production stoppage will be completely implemented during days of worst air pollution.

By the end of February, a total of 14 rounds of environmental governance and inspection have been implemented by local governments in Sanmenxia since 2017, with about half of those actions carried out in the last 8 months of this period, during which production facilities change from stoppage to limited production and then to stoppage again. The same situation happens to other regions in Henan province and also parts of Shanxi province, which has seriously affected supply for many refractory minerals.

China government has shown its determination to improve the environment by actions in the past 2 years, followed by the firm attitudes from local authorities in different cities of the country, which is impossible to change until the environment in China would have been improved. Refwin quoted unnamed sources, local authorities in Zhengzhou are doing works to release some high quality capacity by clarifying differentiated environmental policies to local smelting facilities, calcination and process plants i.e. “one plant, one policy”, by which it regulates what condition and what extent can a plant conduct production, which means some licensed plants are able to release more capacity even under severe air polluted conditions. This sounds to be a good news at current stage of supply risk.

In the winter of 2018-2019, it’s found that the overall market price for WFA, BFA, calcined bauxite shows no significant changes (calcined bauxite for some grades increased for dozens of yuan) in China market, although those minerals are all in extreme shortage of supply. The reason mainly lies in the depression of demands both from domestic and global market.

It seems that the market has entered a relatively stable status in China for refractory mineral under environmental protection implementation, in which various minerals are find their price position in the new market situation, at which it’s hard for them to get sharply up or down in price.

In 2019, the situation of bauxite ore ban plays a very key role in 2019 for alumina based refractory minerals, just like the dynamite ban plays the same very important role to magnesia-based refractory minerals. We have seen the price down of DBM and FM, after dynamite was available to parts of mine facilities in this year. The situation may turns to be clearer after NPC and CPPCC.

Conducting negotiations with international investors for the sale of Kümaş Manyezit Sanayi AŞ, Yıldız Holding made a statement to London Stock Exchange (LSE) announcing the signing of an exclusivity agreement with the Australian company RHI Magnesita.

The statement made by RHI Magnesita to LSE was as follows:”As announced previously, the Company continues to consider a potential transaction involving Kumas Manyezit Sanayi AS and the Company has entered into an exclusivity agreement with the sellers, Yıldız Holding A.Ş. and Gözde Girişim Sermayesi Yatırım Ortaklığı A.Ş. As a market leader in its segment, RHI Magnesita regularly seeks to evaluate opportunities that may arise to participate in the ongoing consolidation of the refractory industry, however there can be no certainty that any transaction will occur.”

Improved production in most mining areas is prompting hopes that andalusite supply tightness may ease in the near to mid term, but prices are expected to stay firm due to strong end markets.

Section 232, a provision not known to many in the past, has been the topic of heated discussions in US political and industry circles since the administration of President Donald Trump imposed tariffs under that Section on steel and aluminium imports into the country.

The six-day shutdown at Hydro’s Alunorte refinery has hit the company’s alumina output.

The shutdown of Brazilian alumina refinery Alunorte for a few days in October could bring its production volume down by 20,000-30,000 tonnes in the fourth quarter, according to Eivind Kallevik, chief financial officer of the unit’s owner, Norsk Hydro.

Hydro produced 821,000 tonnes of alumina during the third quarter of 2018. If output goes down by as much as 30,000 tonnes, that would mean a reduction of less than 4% of the three-month output volume.

Alunorte is currently operating with output limited to 50% of capacity because of government restrictions.
In February, the company was accused of letting bauxite waste overflow from its deposits into nearby soil and waters. Federal and state authorities then limited capacity utilization at Alunorte to 50%, which was later extended to the Paragominas bauxite mine and Albras aluminium smelter.

Alumina prices were expected to remain high during the final three months of this year, because there was no way to tell when Alunorte’s operations will return to normal. The company’s costs could rise as high as Nkr200 million ($24.14 million) because of this, Kallevik said during Hydro’s third-quarter earnings call on Wednesday October 24.
Fastmarkets’ daily benchmark alumina index was assessed at $493.75 per tonne fob Australia on October 24, down from $494.17 per tonne the day before. Inferred Brazil fob prices were $499 per tonne, down by 0.2%.

The company decided to halt operations at Alunorte, in the northern Brazilian state of Pará, after its oldest solid-waste deposit approached the end of its life cycle. At the same time, it sought an operating permit for the newest deposit, which was issued by Brazil’s federal environmental agency, Ibama.

Alunorte was shut down completely from October 3 to October 8, after which output was resumed at 50% capacity.
There was still no timeframe for the removal of the restrictions, Hydro executives said during the conference call. But the company has already secured a supply of alumina that will last until the year-end, according to chief executive officer Svein Richard Brandtzæg.