Guinea bauxite export disruption pushes China alumina to record high
GAC faces bauxite exports issue in Guinea, says parent firm
GAC has supply deals with Chinese and Indian firms
Alumina prices hit record high in both futures and spot markets
Updates prices, adds details throughout
By Mai Nguyen and Hadeel Al Sayegh
HANOI/DUBAI, Oct 11 (Reuters) -China alumina futures hit a record high on supply worries in an already tight market, after a bauxite miner in Guinea faced export issues, industry players said.
Emirates Global Aluminium said bauxite exports from its subsidiary Guinea Alumina Corporation (GAC) had been suspended by customs.
Bauxite is the raw material of producing alumina, the main ingredient in making aluminium.
"We are seeking clarity from customs on the reason for this action, and are working to resolve this as quickly as possible," EGA said in a statement in response to Reuters request for comment.
"Production at Al Taweelah alumina refinery continues as normal," it said.
The most-traded November alumina contract on the Shanghai Futures Exchange SAOcv1 surged as much as 4.7% to a record 4,716 yuan ($667.58) a metric ton during Asia night trading on Friday, which is counted towards the price of Monday Oct. 14.
Earlier on Friday, the contract surged as much as 6.4%.
The Al Taweelah refinery produced 2.48 million tons of alumina in 2023. It uses raw materials from GAC, which exported 14.1 million tons of bauxite last year, Emirates Global Aluminium said on its website.
GAC has signed supply deals with Chinese and Indian firms, the miner said on its website.
"Any news could ignite the Shanghai Futures Exchange price as the alumina spot market is already tight," said a trader in China.
However, if the GAC issue is resolved within a few weeks, the impact on alumina output will be minimal, the trader said.
Chinese alumina consumption has been strong as domestic aluminium producers ramped up production amid healthy profits. The news also pushed up aluminium prices on Friday.
"Alumina prices have support in the short term from shortage of domestic Chinese bauxite supply, high price of imported bauxite and strong demand," said Chen Xinlin, managing consultant at Wood Mackenzie.
The China spot alumina price hit the highest since at least 2012 at 4,241 yuan a ton on Friday, according to Shanghai Metals Market data published on LSEG Workspace. It has surged 36% this year and is set for a fourth straight yearly gain.
China's alumina market will remain in shortage during October-December. The deficit might ease in the first quarter of 2025 if 3.6 million tons per annum of new alumina capacity are commissioned as planned, consultancy Mysteel said.
($1 = 7.0659 yuan)
China spot alumina price https://tmsnrt.rs/3ZUBbv4
Shanghai alumina futures https://tmsnrt.rs/48aLk96
Reporting by Mai Nguyen in Hanoi and Hadeel Al Sayegh in Dubai; Editing by Shilpi Majumdar and Christina Fincher
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
