After registering over 11 MMT of imports in both March and April before hitting a record 12 MMT in May of this year, China’s seaborne bauxite intake began a halting decline. China imported 9 MMT of Bauxite in October, a month-on-month increase of about 0.8 MMT against September (8.2 MMT), the lowest monthly intake since December of last year. Unsurprising as China’s bauxite imports tend to peak in Q2 or Q3 before falling off for the rest of the year. After all, China has imported nearly 104 MMT in the first ten months of 2022 (+13 MMT/+14% y-o-y), with 57 MMT from Guinea (+9 MMT/+19%) and 16.7 MMT from Indonesia (+3 MMT/+21%), benefiting the Cape and Supramax sectors, respectively. Australia, which uncharacteristically declined for the time last year after 18 years of consecutive export growth remains flat on the year at 28.5 MMT, negative for the Post-Panamax sector which loads almost every Australian shipment.

More worrying than a seasonal decline in bauxite imports was the increase in China’s alumina exports (the material refined from raw bauxite), which not only began climbing in April for the first time in history but actually outpaced imports this year. With energy prices hitting stratospheric levels, the energy-intensive aluminum smelting industry clearly suffered from the rise in costs. China’s alumina export growth further suggests that, despite the import surge in bauxite, at least some of these shipments were being driven by contract commitments rather than underlying demand alone. Giving credence to this assumption is the fact that, despite all suppliers to China displaying an increase on the year to October, only Guinea, heavily financed by and tied to Chinese firms, has increased annual exports since May. Indo’s exports to China increased by 4.8 MMT in the first four months of the year, but declined by 1.8 MMT y-o-y from May to October.

However, it appears that Chinese demand has begun to normalize, with alumina exports falling back over the past two months and once again below its imports. China’s vehicle production, which serves the primary demand driver for domestic aluminum, has climbed by 9% y-o-y. Although aluminum production has climbed only 1%, it has been increasing y-o-y every month since July, and October’s 9% growth figure is the highest since March of last year. With the Chinese domestic automobile industry ticking along at its current pace, and China resuming aluminum production, the outlook for bauxite trade remains positive.