Melbourne, Australia (PRWEB) May 14, 2014
Australia is a substantial alumina producer, accounting for about one-quarter of total world production each year. Alumina production is expected to total 20.9 million tonnes in 2013-14, compared with 19.6 million tonnes in 2008-09. Alumina output is expected to decline in 2013-14 as Rio Tinto's Gove refinery reduces output and domestic demand from aluminium smelters falls. Alumina output surged in 2012-13 as the full-year effect of large expansions at the Worsley, WA and Yarwun, QLD refineries drove volume growth. Although some alumina is smelted into aluminium locally, the great bulk of output is exported. These exports, amounting to an expected 15.4 million tonnes in 2013-14, are expected to generate revenue of $5.2 billion for the year. Imports of alumina are negligible by comparison. The size of the local market for alumina, estimated at $1.9 billion in 2013-14, is dwarfed by the value of exports.
The Alumina Production industry is expected to generate revenue of $7.1 billion in 2013-14, down from $9.1 billion in 2008-09. This represents a contraction of an annualised 4.9% for the five years. IBISWorld industry analyst Alen Allday states “lower alumina prices (in Australian dollars and after adjustment for inflation) are responsible for the fall. These lower prices reflect the impact of a stronger Australian dollar over most of the five-year period.” Alumina prices are typically set in US dollars, and the appreciation of the Australian dollar has had a negative effect on prices in local currency. IBISWorld expects revenue to decline by 3.8% in 2013-14 due to lower volumes and slight pricing growth. Industry revenue is expected to make small overall gains during the five years through 2018-19 due to increased output and higher prices. According to Allday, “despite the planned closure of Rio Tinto's Gove refinery in 2014-15, industry output is expected to increase from 2015-16 on higher export levels.” Australian dollar alumina prices are expected to fluctuate during that period, albeit around an upward trend.
The Alumina Production industry is highly concentrated, with only a few large firms accounting for the bulk of production. Alcoa and Rio Tinto both account for a substantial proportion of industry revenue. The industry concentration level has remained stable over the past five years due to the small number of firms operating in the industry and limited merger activity. Australia is the largest alumina producing country worldwide and its refineries are cost competitive. High industry concentration reflects the large minimum efficient plant size required for alumina refineries to compete on the global stage. Major industry players include Alcoa of Australia, Rio Tinto and BHP Billiton. For more information, visit IBISWorld’s Alumina Production report in Australia industry page.
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IBISWorld industry Report Key Topics
Firms in this industry refine bauxite into alumina (or aluminium oxide), a process that is sometimes also called bauxite refining. All of Australia's alumina refineries use the Bayer process, which involves grinding the bauxite and mixing it with sodium hydroxide. After settling, that mixture is filtered, and the alumina is recovered and allowed to crystallise. Finally, the alumina is washed and dried.
Key External Drivers
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Cost Structure Benchmarks
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Technology & Systems
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