Rusal is reported to have begun a staged reopening of its Achinsk operations, Russia’s largest alumina refinery, following last week’s explosions at a nearby military base. On 5 August, a fire at an ammunition depot in the Siberian town of Achinsk triggered large explosions that left one dead and eight injured. Rusal, the largest aluminium producer in the world outside of China, suspended operations at the plant and evacuated all but essential staff. The Achinsk plant is reported to have a capacity of 1.07Mtpy, with production in 2018 estimated at 80% of capacity. Reuters reported the start of a phased resumption of operations from 6 August but it is not known how long it will take for the plant to recover to typical production levels.
Lack of tightness in the prevailing alumina (and bauxite) market means that a temporary closure would be unlikely to affect overall alumina prices, which have been declining throughout 2019. In any case, it is assumed that the plant will soon be back to normal operating levels. There are, however, many other factors that could affect the sector over the next decade, which are addressed in Roskill’s new report on the bauxite and alumina market, to be released later this month.
Alumina prices are currently falling from their 2018 peak with the reversal of several perceived threats to the industry, as well as weakening demand. In 2018, a perfect storm of events pushed up alumina prices; these included the forced, partial closure of Alunorte in Brazil, threat of US sanctions against Rusal, and a strike in Australia. These threats have since dissipated and alumina index prices have now returned to values seen before the issues of 2018.
Future industry concerns that could affect prices are focussed on China, where exhaustion of existing reserves is expected play a larger role in limiting supplies of bauxite suitable for calcining. There are conflicting reports coming out of China regarding the issue of permissions for potential new bauxite mines. In addition, demand is increasing for certain grades of material, including those suitable for use in the rapidly growing market of lithium-ion battery separators.
Roskill’s NEW report Non-metallurgical Bauxite & Alumina: Outlook to 2029, 10th edition is due for publication in August 2019. Click here to download the brochure and sample pages, or to access further information.