Potential Malaysia bauxite ban to chip away at China stockpiles -industry – by Joseph Sipalan and Melanie Burton (Reuters U.S. – January 4, 2016)


KUALA LUMPUR/MELBOURNE, Jan 4 A potential suspension on bauxite mining in Malaysia, the world’s top exporter of the aluminium-making ingredient, could dent stockpiles in China but is unlikely to curb breakneck output in the aluminium sector there, industry and analysts said on Monday.

The Southeast Asian nation is pushing to suspend bauxite output due to concerns over its impact on the environment, threatening to interrupt supply to No.1 aluminium producer China, a cabinet source said at the weekend.

The councillor in charge of the environment for Malaysia’s main producing state of Pahang, Mohd Soffi Abd Razak, told Reuters on Monday that Pahang’s chief minister and the national resources minister would make a joint statement on the issue “very soon”.

World prices for aluminium, used in everything from planes and trains to packaging, sank to their lowest in more than six years last November as China grapples with oversupply fuelled by its slowing economy.

That forced China’s loss-making industry to band together to pledge production cuts, with markets looking out for any other signs output could ease.

“(A suspension in Malaysian bauxite mining) will impact stockpiles, but it won’t impact China’s metal production,” said Paul Adkins, managing director of consultancy AZ China.

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