Aluminium prices surged on Friday as concerns over supply disruptions from Guinea, a major exporter of bauxite, tightened the global market for alumina, the primary ingredient in aluminium production.
Emirates Global Aluminium announced that its subsidiary, Guinea Alumina Corporation (GAC), had faced a suspension of bauxite exports by Guinean customs. The company is currently seeking clarification regarding the reason for this suspension.
Three-month aluminium on the London Metal Exchange (LME) climbed 2.2% to $2,641 per metric ton, reflecting the market’s concerns. Alumina prices on the Shanghai Futures Exchange (SHFE) also hit a record high as China, the world’s largest aluminium producer and consumer, has become increasingly reliant on Guinean bauxite.
Julius Baer analyst Carsten Menke highlighted the various supply disruptions that have occurred along the alumina and bauxite value chain this year, contributing to rising prices and making traders cautious.
Natalie Scott-Gray, an analyst at StoneX, noted that bauxite exports from Guinea, which account for 70% of global seaborne exports, have increased by 23% so far this year, primarily due to higher supplies from Guinea Alumina Corporation. Last year, the company exported 14 million tons of bauxite.
While copper prices rose on Friday, they were still on track for the largest weekly decline in five weeks. The recent price rally has negatively impacted physical demand, and inventories in top consumer China have also risen.
The Chinese stimulus announcements on Tuesday fell short of market expectations, lacking specific details. However, the focus has now shifted to the anticipated release of further information on Chinese stimulus measures on Saturday.