Alumina is aluminum oxide which is an intermediate product during the manufacturing of aluminum from bauxite. Australia and China are the largest producers of bauxite with a combined production of over 110 million metric tons in 2012. However, production in countries such as India and Indonesia has been on the rise and Asia pacific accounted for over 45% of global production in 2012 as compared to 16% ten years ago. The increase in non captive bauxite volume has resulted in increased bauxite trading and shipping leading to varying market dynamics.
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Bauxite and alumina are primarily consumed in the manufacturing of aluminum. However, owing to their distinct physical and chemical properties, they are used in a variety of other applications. Calcined alumina, a synthetic corundum of bauxite, is extensive used as an abrasive material in polishing material and sand papers. Sintered bauxite is also used as a proppant in oil fields in order to maintain oil pressure during the drilling process. Alumina is used as filler in plastics because of its chemical inertness and white color. Alumina is also used as an industrial catalyst in a host of reactions and also as a purification agent. The other applications of alumina include paints, composite fibers and abrasive among others.
The bauxite and alumina market can be segmented as metallurgical and non metallurgical products. A metallurgical segment includes the bauxite and alumina used for extraction of aluminum and is the largest product segment. The non metallurgical segment includes the applications mentioned above and was a relatively smaller market in 2012. The key driver for the market is the growing demand for automotive and infrastructure in countries of Asia Pacific.
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India and China have witnessed high growth in these sectors resulting in increased demand for aluminum which in turn has increased the demand for bauxite and alumina. However, the limited bauxite reserves coupled with regulatory pressure to curb illegal mining are expected to have serious impact on the development of the market over the forecast period.
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