Energy News Beat
China’s remarkable thirst for bauxite to manufacture aluminium has helped prop up cape rates considerably in recent years. Now for the first time, the capesize fleet in carrying more bauxite than coal, according to broker Arrow.
“Volumes from Guinea have surged at the start of the year, whilst panamaxes have been cannibalising capesize coal cargoes. This leaves bauxite as the number two capesize commodity, after iron ore,” Arrow stated in a report.
China imported 159m tonnes of bauxite last year, up by 18m tonnes over 2023’s total, with 77% of all shipments carried out on capes, according to AXS data.
Volumes from Guinea have surged, whilst panamaxes have been cannibalising capesize coal cargoes
“This owes not just to Guinea’s emergence as the world’s dominant supplier of the raw material, but also the rising capesize share of Australian bauxite trades in recent years, quadrupling from 2021 to reach 20% last year,” explains a new report from another broker, Braemar.
“Infrastructure improvements in West Africa, led by Guinea and including Ivory Coast, Sierra Leone, and Ghana, are expected to drive further increases in supply for the seaborne market, and especially supply for China,” predicts rival broker BRS who is forecasting exports of the mined product from West Africa to China to increase by another 20m tonnes this year.
“Beijing’s continuous promotion of the ‘New Three’ (namely electric vehicles, lithium batteries, and solar panels) is significantly boosting the demand for aluminium products,” BRS pointed out in its latest weekly dry bulk report.
“Considering the longer voyage distances, the bauxite market is expected to exert an increasing influence on the capesize segment via heightened volatility in the fronthaul route,” BRS concluded.
The remarkable rise of the seaborne bauxite trades will be one of many discussion points at Geneva Dry, the world’s premier commodities shipping event, which is set to reconvene at the Hotel President Wilson on the shore of Lake Geneva on April 28 and 29 this year.
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