ABx is selling into the strengthening cement & fertiliser markets until Chinese demand recovers
Bauxite Market Snapshot
Sydney, May 29, 2017 AEST (ABN Newswire) - Current trends in the metallurgical grade Chinese markets are encouraging (see the link below) and Australian Bauxite Ltd (
ASX:ABX) is beginning to engage with potential customer refineries - but current prices still need to rise a bit yet.
In the meantime, ABx will grow its bauxite business by supplying cement-grade bauxite for making high-strength cement and supplying fertiliser-grade bauxite for making superphosphate fertiliser. As demand for stronger, low alkali cement increases for infrastructure construction (especially in the USA), demand should increase for cement-grade bauxite of the type marketed by ABx. ABx bauxite is exceptionally low in alkali salts and is quartz-free.
Infrastructure construction markets
ABx may sell more cement-grade bauxite because of the proposed increase in infrastructure construction that is being proposed by the new US administration. ABx bauxite is suitable for all infrastructure construction, be it bridges, tunnels or roads.
ABx's low-sodium, low alkali cement-grade bauxite supplies the right forms of Al2O3, Fe2O3 and SiO2 in the correct ratio to increase the production rate of extra-strong, corrosion-resistant Portland cement, by stopping kiln blockages, reduces fuel consumption and saves wear and tear on the kiln refractory brick linings.
Several North American cement-grade bauxite customers are reporting bullish outlooks for high-strength cement as the new American administration embarks on a major rebuilding of the USA's infrastructure. ABx will be a beneficiary should this promise become reality. The demand for fertiliser also continues to grow.
Validation feedback: The performance of ABx cement-grade bauxite through the kilns and resulting cement products have been exemplary. "ABx bauxite is the best favour you can do for yourself and your cement plant".
Metallurgical Grade Bauxite Market (for aluminium production) SIGNS OF RECOVERY?
Metallurgical-bauxite prices fell in 2015-16, steadied in late 2016, showed weak signs of improvement in early 2017 and have risen recently, especially since the Guinean government announced its intention to curb bauxite exports to encourage more alumina refining in Guinea, just as Indonesia did in 2010-14. However, this price increase could just be due to a seasonal increase in higher-priced bauxite from Guinea and a seasonal reduction in lower-priced Australian bauxite. Some reports suggest that price increases from some countries are due to tax rule changes.
The following Figure 3 (see the link below) overleaf showing prices by country supports the "seasonal variation" explanation:
Other than slight rises in average bauxite prices for Indian bauxite and Malaysian bauxite (both similar to ABx's bauxite), bauxite prices have been flat, but the quantity from Guinea has grown strongly (doubling in the last 6 months to 2.336 million tonnes in May'17) whilst lower-priced tonnes from Australia have fallen by 30%.
The Chinese metallurgical bauxite market was severely disrupted in 2015 & 2016 by oversupply from Malaysia, Guinea and Australia when Chinese demand was weakening. Demand is catching up, prices have stabilised and are expected to improve in 2018. ABx will sell metallurgical bauxite when prices and demand are attractive.
The CBIX leading price indicator (see Figure 6 in the link below) shows a rising average bauxite price in April and May 2017 but this could be seasonal as tonnages of higher-priced bauxite supply increases?
Prices for metallurgical bauxite remain unattractive to build new mines dedicated to only supplying Chinese alumina refineries. This is why ABx continues to develop its cement markets for cement-grade bauxite and to diversify its range of customers.
To view tables and figures, please visit:
http://abnnewswire.net/lnk/RL10BN8R
About ABx Group Limited
ABx Group Limited (ABx) (ASX:ABX) started as a bauxite miner in Tasmania in 2014 & controls the Eastern Australian Bauxite Province. In 2020 to 2023, ABx also discovered Australia’s only true ionic adsorption clay Rare Earth Elements resource at Deep Leads in pine plantations 40km west of Launceston with a JORC-compliant resource of 89 million tonnes from only 29% of the mineralised outline, averaging 844 ppm total rare earth oxides that is the most enriched in the critically important rare earths, Dy and Tb, of any Australian REE deposit.
ABx has also developed a proprietary technology to produce fluorine chemicals from an aluminium smelter waste product and return the fluorine back into the smelters, thus reducing reliance on imported aluminium fluoride.
ABx has committed a large proportion of its expenditure into Research and Development and has found ways to capitalise on the main strengths of its bauxite type which is very clean, free of all deleterious elements and can be separated into different product streams using physical, chemical and geophysical methods. It has produced and marketed specialist bauxite products for the manufacturers of fertiliser, cement with high late strength for major infrastructure such as bridges and is in the advanced stages of approvals for production of metallurgical bauxite from its Binjour Bauxite deposit with JORC-compliant resources of 37 million tonnes of bauxite, in a joint development with a Chinese-focussed Australian trading company Good Importing International.
ABx is also preparing to produce fertiliser grade and cement grade bauxite from its DL130 bauxite quarry in northern Tasmania, 40km west of Launceston. This quarry is sited in the middle of the large Deep Leads REE deposit and may one day be a site for heap leaching of the REE using a low-cost, benign leachate with the same acidity as apple juice or tea.
ABx endorses best practices on agricultural land, strives to leave land and environment better than we find it. We only operate where welcomed.
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