Bauxite, alumina to bounce back on climbing demand

DUBLIN (Scrap Monster): Bauxite and alumina market has been going through a tough time following the economic recession in 2008. Developed countries such as the US, Canada and Japan observed a fall in demand for alumina during 2008-2009 due to the close down of various aluminum smelters, and reduced output.

Prices of the minerals also remained relatively flat during this period. The global credit crisis led to a downfall in automobile manufacturing and home construction activity. This had a direct negative impact on the bauxite and alumina industry.

The use of aluminum for various infrastructure projects in developing regions was dented and the refinery and mine expansion projects in various parts of the world were halted due to the financial crisis. The market is however, expected to recover by 2011 and sustain growth in ensuing years.

Total production of bauxite in 2009 was 201 million tonnes, a decline of about 2% over record high levels in 2008 but still an increase of 29% since 2004 and an increase of 55% over the last decade. Total production of bauxite in 2010 is estimated to have been 215 million tonnes, with much of the growth due to strong demand from China.

More than 95% of raw bauxite is for use in the production of aluminum, with the remaining amount used in non-metallurgical applications, equaling about 8.0 million tonnes in 2010 and about 7.0 million tonnes in 2009, down from a peak of around 10 million tonnes in 2008. The non-metallurgical applications are primarily in the refractories, abrasives, cement and chemicals industries.

These different consuming sectors have had mixed fortunes in recent years. Some, such as water treatment chemicals, which use alumina trihydrate (ATH), have remained quite stable whereas the refractories and abrasives sectors have experienced sharply reduced markets, although these are now recovering.

Growth in the markets for raw bauxite in direct non-metallurgical applications is expected to be 3-4% a year, in such products as slag conditioners, cement and alumina-based chemicals. In recent years there has been considerable concern about the availability and price of calcined bauxite - used in refractories and abrasives - a situation that has arisen because of restricted supply from China.

Growth-wise, Asia-Pacific is projected to be the fastest growing regional market for bauxite and alumina, with a CAGR of about 3.8% over the analysis period. Rapid increase in population and steady economic growth are key factors driving growth in the automotive and construction markets in Asia-Pacific, creating robust demand for bauxite and alumina.

In terms of products, Metallurgical bauxite represents the major segment, while Non-Metallurgical Alumina represents the fastest growing product segment in the global alumina market.

Refractories and abrasives represent the major markets for non-metallurgical bauxite and alumina. Other applications of non-metallurgical grade of bauxite and alumina include aluminous cements, chemicals and proppants. Though there has been a decline in demand for refractories over the years, the application of alumina in end-use continues to remain strong owing to its better performance.

The same is the case in the application of both alumina and bauxite in abrasives. High performance materials would influence the demand for both bauxite and alumina in future. The application of alumina trihydrate in flame-retardants and calcined alumina in electronic ceramics and bioceramics is expected to grow significantly in the coming years.