Brazilian iron major Companhia Vale do Rio Doce said in its latest quarterly report that alumina prices on the spot market had been highly volatile as a result of the substantial increase in Chinese production, based on imported bauxite from Indonesia, and more recently problems in Guinea.
CVRD's average prices realized for alumina were $290.48/mt in 2006 compared with $343.99/mt in 2005, and $331.05/mt in Q4 2006 versus $315.19/mt in Q4 2005.
"Sustainable alumina supply basically depends on the availability of large reserves of good quality bauxite, on reliable bases at competitive costs," CVRD added. The company has completed the first phase of development of the Paragominas mine in the state of Para, with a nominal capacity of 5.4 million mt/year, and is starting to develop the second phase which will add capacity for another 4.5 million mt.
"The availability of significant reserves of high quality bauxite and an efficient alumina operation, with low operational and capital expenditure costs, allow us to grow -- the construction of stages 6 and 7 at the Alunorte refinery proceed at a normal pace -- with sales through long term contracts, and prices indexed to the quotations of aluminum on the LME," the company said. CVRD added that demand for aluminium is increasing due to economic growth and greater penetration in some applications, and inventories have stabilized at levels that are lower than in the recent past.
Meanwhile, revenues from sales of bauxite, alumina and aluminium in 2006 reached $2.381 billion, compared with $1.408 billion in 2005, and not $2.381 million versus $1.408 million as reported in Platts' earlier report.
Average prices realized for aluminium were $2,558.76/mt in 2006, up from $1,841.16/mt in 2005 and $2,725/mt in Q4 2006, compared with $1,870.69/mt.
For bauxite, average realized prices were $30.46/mt in 2006, compared with $28.36/mt in 2005 and $38.10/mt in Q4 2006 versus $30/mt in Q4 2005.
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