PTI reported that aluminium companies are likely to get a breather in the form of falling bauxite prices driven by the demand slump from China.

Experts said that bauxite, which is the key raw material to produce aluminium is usually exported from Gujarat to West Asia and China. However, recent slowdown in China and falling metal prices including aluminium has led to a fall in imports from the major consumer, China.

A top official of Vedanta Aluminium said that “We came to know that export of bauxite from Gujarat has stopped in recent months as Chinese importers are cancelling their orders. This will help the domestic producers with cheaper bauxite ore. Due to Chinese buying of bauxite in higher prices from the country, the raw material prices have not dipped despite falling aluminium prices.”

He said that there was a mismatch between aluminium and bauxite ore prices as China was paying higher price for ore from our country. With lesser demand from China, we hope bauxite ore prices will come down.

Chinese import of bauxite from the country stands at around 5 lakh tonne a month with an average price of USD 45 per tonne to USD 50 per tonne. Despite fall in aluminium prices to around USD 1,720 per tonne from the high level of USD 2,400 per tonne seen in 2008 to 2009, bauxite prices have not dipped due to building up inventory by China to feed its aluminium units.