The Dry Side of Energy Transition.

Maria: Welcome to Current Intelligence, the podcast from Signal Ocean AXS. Every day, millions of tonnes of
cargo move across the world's oceans. At Signal Ocean AXS, we combine advanced shipping analytics,
machine learning, and decades of market expertise to understand what those movements really mean. In each
episode, we go beyond the numbers to explain what's happening, why it matters, and what we're watching next.

Maria: The world has been watching oil, the Strait of Hormuz, and tanker markets. But beneath those
headlines, another story has been unfolding — one that's quietly reshaping dry bulk shipping and helping power
the electric age. Because the energy transition starts long before anything is plugged in. It starts with the raw
materials, and the ships that move them. Today we're following one of those cargoes: bauxite. The rock that
becomes aluminium, and one of the commodities at the heart of the energy transition. I'm Maria Bertzeletou,
Senior Market Analyst at Signal Ocean AXS. To help me make sense of it, I'm joined by someone who lives and
breathes this market — our Vice President of Data Partnerships, Hugo Rousse. Hugo, welcome.

Hugo: Thanks, Maria. I'm very glad to do this podcast together with you, especially on such an interesting
topic.

Maria: I think so too. Because most people probably don't associate bauxite with the energy transition — it
isn't a metal you ever really hear about. But by the end of this conversation, I think they'll see it very differently.

Hugo: Absolutely. It's one of those commodities that's been quietly reshaping the dry bulk market over the last
decade. And today, it's impossible to ignore. Let me share where the name comes from. What isn't so well
known is that it takes its name from Les Baux-de-Provence in southern France, where it was first identified by
Pierre Berthier in 1821. So this mineral, discovered in a small French village, is now our focus of attention.

Maria: Hugo, before we get into bauxite itself, one thing that really stood out to me looking at the data is that
this doesn't feel like just another commodity story. It feels like we're watching an entirely new source of dry
bulk demand emerge. So let's start with the bigger picture.

Hugo: Two things are happening at the same time. On the surface, a geopolitical energy shock — oil prices are
high and very volatile, and Hormuz disruptions clearly impact the energy market. But underneath, a structural
shift: governments and industry now treat electrification as the answer to exactly that kind of shock. The
International Energy Agency says roughly 60% of global energy investment this year is going into
electrification — they call it the Age of Electricity. For us, actively following the dry bulk shipping market, that
isn't an abstract policy story. Electrification has concrete impacts on commodity trade flows, which we notice
and track.

Maria: So that's the backdrop. Now, there are dozens of dry bulk commodities out there — iron ore, coal,
grain, the big familiar ones. So when I say bauxite is one of the most important cargoes to watch, people are
often surprised. Hugo, make the case for me: what makes bauxite stand out?

Hugo: Because it's one of the few commodities that's really changed over the last decade. If you look at the
overall dry bulk market, the mix has been surprisingly stable — iron ore and coal are still the dominant cargoes.
But bauxite tells a different story. Back in 2015, bauxite accounted for about 2% of global dry bulk volumes. By
2025, that had grown to almost 9% — more than four times its previous share. For a market that's usually slow
to change, that's a remarkable shift.

Maria: And that's actually what caught my attention when I first looked at the numbers. Dry bulk trade rarely
changes this quickly, so seeing one cargo multiply its importance over a decade immediately raises the question:
what's driving it? But growth in the past is one thing. Where does bauxite actually sit today?

Hugo: Today, bauxite accounts for just under 10% of global dry bulk volumes. That makes it the third-largest
dry bulk commodity by volume, behind only iron ore and coal. What's remarkable is that it's now generating
more demand for dry bulk vessels than grain, oilseeds, steel products, and many other established cargoes. So
while iron ore and coal still dominate the market, bauxite has firmly established itself as the third pillar of dry
bulk trade.

Maria: So bauxite clearly matters for shipping. But to understand why demand has taken off, we need to take
one step further. Because on its own, it's just a rock. Where does aluminium come into the picture?
Hugo: The link is actually quite straightforward. On average, it takes around four tonnes of bauxite to produce
one tonne of aluminium. The process happens in two stages. First, around two tonnes of bauxite are refined into
one tonne of alumina. Then two tonnes of alumina are smelted into one tonne of aluminium. That's where the
four-to-one ratio comes from. So bauxite is the essential raw material at the very beginning of the aluminium
value chain.

Maria: So that four-to-one ratio is really the link we're following — four tonnes of bauxite moving for every
tonne of aluminium. But aluminium has been around for a long time. So what's changed? Why has it suddenly
become so important?

Hugo: The overall demand for aluminium, according to the International Aluminium Institute, is projected to
increase by 40% by 2030. And aluminium is becoming one of the defining metals of the energy transition. Take
electric vehicles. An EV uses 25% to 27% more aluminium than a conventional combustion-engine car. The
battery adds significant weight, so manufacturers use more aluminium to keep the vehicle as light as possible
and maximise its driving range. By 2030, global electric vehicle sales are expected to reach 40 to 50 million
vehicles a year — around 40% to 60% of new car sales worldwide.

Hugo: Solar power is another major driver. Every solar panel uses aluminium — not only for the frame, but
also for the mounting structure and many of its electrical components. Today, solar panels already account for
8% to 10% of global aluminium demand. By 2030, that figure is expected to rise to around 15%, requiring an
additional 6 to 17 million tonnes of aluminium. In other words, aluminium demand from the solar sector alone is
expected to roughly double. The same trend extends to wind energy. Aluminium is widely used in the nacelle,
electrical systems, wiring, and many other components — even if not in the tower or blades.

Maria: But generating electricity is only part of the story, isn't it? Once that power is produced, it still has to
travel hundreds — sometimes thousands — of kilometres to where it's actually needed. Is that another reason
aluminium has become so important?

Hugo: Exactly. As countries expand and modernise their power grids, demand for aluminium increases as well.
Long-distance transmission lines are predominantly made from aluminium. Although copper conducts
electricity better, aluminium is lighter and much cheaper, making it the preferred material for transmitting power
over long distances.

Maria: Is producing aluminium itself actually using electricity?

Hugo: Turning alumina into aluminium through electrolysis is an extremely energy-intensive process.
Electricity is one of the highest costs in aluminium production, which is why aluminium smelters have
traditionally been built where abundant and competitively priced power is available. So aluminium production
itself is supporting electrification.

Maria: So if you wanted to see the energy transition happening — not through headlines or policy
announcements, but in real trade flows — you could simply follow bauxite.

Hugo: Exactly. Bauxite sits at the very beginning of the aluminium supply chain. As demand for aluminium
increases across electric vehicles, renewable energy and power grids, that demand feeds directly back to bauxite.
That's why seaborne bauxite trade has become such a powerful indicator of how quickly the physical
infrastructure of the energy transition is actually being built.

Maria: So we've established why demand is growing. But in shipping, demand is only half the story.
Geography matters just as much. Where does all this bauxite actually end up?

Hugo: Overwhelmingly China. China doesn't import much aluminium, and it doesn't import much alumina
either. It primarily imports the raw commodity to produce aluminium — so, bauxite — and refines it into
alumina in China. Then it uses that alumina in smelters to produce aluminium, again locally in China. As
mentioned, producing aluminium requires an electrolysis process to transform the alumina into aluminium, and
this is quite energy-intensive. So it requires cheap and abundant electricity. China still mainly uses thermal coal,
despite the fact that they are investing in hydro, solar, nuclear and so on. But the future of further electrification
will change that mix, of course.

Maria: So when we talk about “the aluminium story,” for us in shipping it's really a bauxite-into-China story
— that one import route is what matters.

Hugo: Exactly. The topic is global, but the bauxite trade is concentrated on one import flow: into China.

Maria: What strikes me here is just how concentrated this market has become. On the demand side it's China.
On the supply side it's Guinea. Which country really controls the bauxite story?

Hugo: Again, we have a key player here. Guinea's market share of seaborne bauxite exports was about 54% in
2021. Last year, 72%. In the first half of this year, 81%. In 2025, Guinea shipped around 183 million tonnes of
bauxite — 25% more than the previous year. That's roughly four times more than the next exporter, Australia.
So this is close to a single-source trade.

Maria: Now here's the part that surprised me, and I'd love you to explain it. Normally, when one country has
that kind of grip and demand keeps rising, you'd expect prices to be strong, maybe even climbing. So what has
the bauxite price actually been doing?

Hugo: Logically it's tempting to think bauxite prices are firm and even rising — and that's what happened over
the last few years; it peaked in 2025. But it's been falling in 2026, back to 2023 levels. Why? Because of supply,
led by Guinea — Guinea actually oversupplied the market. And interestingly, that oversupply is exactly what's
triggering a policy response from Guinea. Guinea has already announced it will cap exports: a licence-based
system, targeting 150 million tonnes a year, potentially biting in the second half of this year — well below what
it actually shipped last year.

Maria: So if I've got this right, it's a deliberate move — Guinea holding back its own supply to protect the
price, maybe even push it up?

Hugo: That's the logic. Guinea controls the world's dominant supply, so it's trying to control and support prices
with quotas and licences.

Maria: So this is what makes bauxite so interesting right now — you've got two forces pulling in opposite
directions. The long-term demand picture points in one direction, while the short-term policy picture points in
another. That's a fascinating combination, isn't it?

Hugo: It is — and honestly, that's what makes this Guinea bauxite story so interesting. On one side, a structural
demand megatrend that says bauxite volumes should rise for years. On the other, in the short to mid term, a
country trying to cut export volume right now to defend the price of bauxite and maximise its own revenue.

Maria: And that's the question everyone in the market is asking. Announcing a licence-based cap is one thing,
but enforcing it is another. Realistically, can Guinea make it stick? Last year, Guinea shipped around 183
million tonnes, so cutting back to defend prices and maximise revenue will be a significant challenge.

Hugo: That's the real doubt. Guinea has every reason to talk tough, but a lot of us think actual exports will land
higher than the target — somewhere around 170 million tonnes is more likely than a hard 150. But if the cut is
real, it tightens supply, and demand for Capesize especially takes a hit. In our own numbers, if the quota
genuinely bites and Chinese alumina output holds, China's comfortable surplus of bauxite today could flip to a
deficit of around 3 million tonnes a month by the end of the year. Though it's difficult to imagine China cutting
its aluminium production for a lack of bauxite.

Maria: So let's bring all of that back to what our audience really cares about — the ships. If that plays out,
what does it mean for Capesize demand?

Hugo: The swing between “bauxite keeps flowing” and “the quota bites” represents roughly 46 Capesizes of
demand. In our low case, if the quota bites, we see an overall increase for Capesize — counting other
commodities and trades too — of only 1%. Whereas if bauxite keeps flowing, our high case, we see an increase
of 4.6% for Capesize vessels. So the reality will be somewhere between the two. But bauxite, on its own, can
move this market.

Maria: So let me pull this all together. Some of the most credible forecasts project that global aluminium
demand will rise by about 40% by 2030. Even if that forecast proves optimistic, and because it takes four tonnes
of bauxite for every tonne of aluminium, that turns into a big, multi-year pull on the exact cargo we've been
talking about. Do you see it the same way, Hugo?

Hugo: Yes, absolutely. But keep in mind that, in the short term, Guinea's quotas and licences can make it a
bumpy year — mixed signals, a bauxite price fight, maybe a dip in volume. But what is sure is that the longer
trend is an upcoming increase in demand for bauxite. So if you want one shipping cargo that tells you whether
the electric age is real, watch bauxite. It's a clear indicator of the electrification megatrend.

Maria: And that, for me, is the whole point. We opened with oil and Hormuz — the story everyone's watching.
But the quieter, and maybe bigger, story is happening in dry bulk. A rock most people have never heard of has
become the third-largest cargo on the water, because the electric age has to be built out of something, and a huge
part of that something is aluminium — which starts as bauxite. There'll be short-term disruptions: Guinea's
quota, price movements and periods of weaker volumes. But the long-term direction is clear. So the next time
you see an electric car, a solar farm, or a new power line, picture the Capesize that helped make it happen.
Hugo, thank you — this has been a real pleasure.

Hugo: Thank you, Maria.