Global aluminum production has nearly tripled since the beginning of the millennium, with the effects of this growth most prominently felt in the dry bulk market. The maritime trade of bauxite reached a new record last year.

According to an analysis by Ursa Shipbrokers based on data from the International Aluminum Institute (IAI), global primary aluminum production is projected to increase by 1.1% annually to reach 73.8 million tons by 2025, marking an all-time high. This figure indicates a 199% increase compared to the year 2000, once again highlighting the critical role of aluminum in the transportation, construction, energy infrastructure, and consumer goods sectors.

The main driver behind this growth is China. Since 2000, China has increased its primary aluminum production by nearly sixteen times, driving almost the entirety of global expansion. At the beginning of the century, China accounted for only 11% of global production, but by 2025, it is expected to increase its share to approximately 60%, or 44.2 million tons.

Production increases outside of China have remained quite limited. While there was a steady increase in the early 2000s, this trend largely stalled after the mid-2000s. As a result, the global aluminum supply chain has become increasingly dependent on Chinese demand.

Primary aluminum production relies on aluminum refined from bauxite. As production volumes have increased, the demand for both raw materials and the ships carrying these loads has also risen rapidly.

According to Ursa's forecasts, global bauxite shipments transported by sea are expected to reach approximately 246.6 million tons by 2025, setting a new record. This represents an increase of about 42 million tons, or 21%, compared to the previous year. Thus, bauxite has become one of the most noteworthy dry bulk cargo items in recent years.

In 2016, global bauxite shipments were around 78.5 million tons. Since then, volumes have recorded an annual compound growth rate of approximately 14%. This increase reflects both the rise in global aluminum production and China's growing dependence on imported ore.

On the supply side, it is largely concentrated in a few countries. Guinea is expected to account for about 73% of global bauxite shipments by 2025, solidifying its position as the main long-distance supplier to the world and China. Australia ranks second with a share of about 18%, and together, these two countries provide more than 90% of the bauxite transported by sea.

On the demand front, China is by far the leader. An estimated 88% of all bauxite cargoes loaded onto dry bulk carriers last year were transported to China, feeding the country's massive alumina refining system.

China's aluminum production is very close to the Beijing government's annual production cap of 45 million tons, with some data even indicating it is slightly above this limit. Therefore, the aluminum-bauxite trade is likely to continue being one of the main driving forces of ton-mile demand in the global dry bulk market, even as other segments show slower growth.

Source: SeaNews Türkiye