China’s import figures for bauxite and alumina illustrate one point about these markets that most commentators failed to notice or understand. In a dynamic and evolving industry, there’s not enough time to develop new supply sources.

China’s imports of bauxite so far this year are well down on 2013, with 22 million tonnes imported, for a decrease of 42%. This is to be expected, since 2013’s result was heavily loaded with stockpile material, much of it still ahead of the refineries.

This material has come from places such as Australia and India, but also Ghana, Fiji, the Dominican Republic and even Malaysia. So so far, no emerging source has elevated itself to a status anything like where Indonesia was at prior to the ban.

Meantime, China’s imports of alumina are accelerating. To the end of July, China had imported 3.2mt, for an increase of 72%. It’s a counter-intuitive result, since China has plenty of refinery capacity, which goes under-utilized when alumina is imported.

To some extent, the increase in imports was offset by a deterioration in price, with too much alumina in stock earlier this year when smelters were shutting their doors.

But those idled smelters are now restarting, and new capacity is coming on stream, and those plants and their raw materials managers can’t wait for entrepreneurs to negotiate with foreign governments and build infrastructure and establish bauxite supply routes from new sources. Those managers need the alumina now, not next year or the year after.

As a result, we at AZ China believe the level of imports of alumina will rise more strongly than we originally predicted, and the price of that alumina will also rise.

We will have more information on the supply balance in our upcoming Black China Report, due out tomorrow (Monday 15th).