Alumina price to drop 18% in 2016
GLADSTONE alumina refineries QAL and Yarwun are expected to refine more product this year despite low prices and an already over-supplied market.
According to the Resources and Energy Outlook report from Department of Industry, Innovation and Science too much alumina in the market in 2015 pushed the price down by 8% and in 2016 it is forecast to decrease by 18%.
It will put pressure on Gladstone's refineries.
China was expected to continue to increase production of alumina in 2016 as new and suspended refineries start producing more. But, the report stated, QAL and Yarwun would drive an increase in Australian production.
The low Australia dollar is expected to help exports as the overseas buyers can buy it for cheaper.
Rio Tinto expects poor quality bauxite in China to start reducing Chinese alumina production.