Market Trends of Bauxite Industry
Increasing Demand of Alumina for Metallurgical Purposes
- Bauxite is a sedimentary rock having a high content of aluminum. It is the main source of aluminum & gallium and consists mostly of aluminum minerals, namely gibbsite, boehmite, and diaspore.
- Because of its high alumina content, bauxite is a primary source for alumina production, which is then processed to produce finished products and alumina production. Thus rising alumina production is driving the market studied.
- The demand for alumina is increasing owing to its various superior properties such as low density, non-toxic nature, high thermal conductivity, excellent corrosion resistivity, and its ability to be easily cast, machined, and formed. Rising alumina production is expected to drive the market for bauxite through the upcoming years.
- Alumina is used for key industrial purposes. Other than producing aluminum, it is used for the production of spark plug insulators and metallic paints, and it is used as a fuel component for solid rocket boosters.
- Furthermore, alumina is used for the fabrication of superconducting devices, such as quantum interference devices and electron transistors. Aluminum oxide or alumina is also used as a dosimeter for radiation protection.
- According to a US Geological survey, global resources of bauxite are estimated to be between 55 billion and 75 billion tons and are sufficient to meet world demand for metal well into the future.
- As per the United States Census Bureau, revenue in mining and quarrying amounted to USD 14.39 billion in 2022, as compared to USD 13.68 billion in 2021. The revenue from this sector is projected to amount to USD 15.25 billion in 2023.
- As per data published by the United States Geological Survey, the bauxite and alumina increased significantly from 2790 million metric tons.
- Mining and metallurgy are key industries in the country. Canada supplies over 60 metals and minerals to different countries worldwide. The mining industry invests in innovation and new technologies, which rapidly reshapes the sector. The mining industry also witnessed consolidations, which led to speculations regarding the growth prospects for the industry in the coming years.
- Therefore, owing to all the above-mentioned factors, increasing demand for alumina for metallurgical purposes is expected to boost the demand for the market studied over the forecast period.
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Asia-Pacific to Dominate the Market
- Asia-Pacific is expected to dominate the market for bauxite during the forecast period. In countries such as China, Australia, and India, owing to rapid industrialization and an increase in the usage of aluminum in various industries, such as building and construction, foil, and packaging, the demand for bauxite continues to increase in the region.
- Furthermore, superior properties of aluminum, like corrosion resistance, high ductility, high strength, and lightweight, have led to an increase in the adoption of aluminum for producing light vehicle parts, which is propelling the bauxite market in the region.
- Additionally, demand for bauxite is rising in the region due to its usage as a raw material in making refractory products since it has a high melting point. Refractory grade bauxite is used to manufacture bricks to line the roof of electric arc steel-making furnaces and blast furnaces.
- Bauxite is also used for manufacturing cement by mixing it with limestone. The cement produced has high alumina content and is known for its rapid settling time and strength, leading to an increasing demand for bauxite in the region.
- The increasing trend of electric vehicles may further propel the demand for aluminum alloys. The government of China estimates a 20% penetration rate of electric vehicle production by 2025. This is reflected in the electric vehicle sales trend in the country, which went record-breaking high in 2022. As per the China Passenger Car Association, the country sold 5.67 million EVs and plug-ins in 2022, touching almost double the sales figures achieved in 2021.
- The domestic electronics manufacturing sector has been expanding at a steady rate, owing to favorable government policies, such as 100% Foreign Direct Investment (FDI), no requirement for an industrial license, and the technological transformation from manual to automatic production processes. New incentives, such as the Modified Incentive Special Package Scheme (M-SIPS) and Electronics Development Fund (EDF), have been started in the country with a budget of USD 114 million for the domestic manufacturing of electronics in India.
- Some of the major manufacturers of the market studied operating in Asia-Pacific include Alumina Limited, Australian Bauxite Limited, and Rio Tinto.
- Therefore, the aforementioned factors are likely to boost the demand for bauxite in the region during the forecast period.
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