Factors That Affect Fused Alumina Market Price
China is one of the largest fused alumina producers globally and the output cut will impact exports to international refractories and abrasive end markets. Currently, there are several factors that mainly influence the fused alumina abrasive and refractory market.
First, on-going anti-pollution inspection.The strict environmental inspection still goes on.The Ministry of Ecology & Environment (MEE) has issued new standards for levels of dedusting, desulphurisation, and plants are now required to install on-line inspection detectors. Only those plant that pass the inspection will be permitted to continue production. Most plant spent a considerable amount investing in anti-pollution and detection installation and is expected to pass the inspection. Environmental inspectors have moved into Henan province–the main fused alumina producing region in China –since mid-July, and many facilities were compelled to close while the inspections took place.
Second,Raw material bottleneck. The higher prices were a direct effect of rising raw material cost, and did not contribute to higher profit margins. The graphite electrode prices have increased to above Chinese Renminbi (Rmb) 60,000/tonne ($9,003/tonne), up from Rmb 50,000 ($7,502/tonne) in end-July. Fused alumina producers estimate around 2-23kg of graphite electrode is used to produce every tonne of fused alumina, and the price spike has further supported upticks in this market. The supply of locally mined high-grade bauxite ore remained restricted, which has further impacted fused alumina production.
Third, Bauxite/BFA: Shanxi shutdown. The bauxite mines in Sanmenxia City, Henan, the main raw material feedstock supply for BFA plants in Henan and Shanxi, were closed for most of July and there are fears that the shutdown may last for months.