Global alumina markets tighten as Guinea bauxite export disruption looms

Alumina futures on the Shanghai Futures Exchange soared to a new record, driven by bauxite supply disruptions from Guinea and sustained demand from China. On Friday, alumina prices surged by as much as 6.4 per cent, reaching RMB 4,630 ($655) per tonne on the Shanghai Futures Exchange, marking the highest level since the contract's debut in June 2023.

In tandem, the price for alumina shipments from Western Australia also saw a significant rise, climbing to $550 per tonne, the highest level recorded in data going back to 2021. The tightening market for alumina, a key feedstock for aluminium smelters, is primarily attributed to supply chain challenges and resilient Chinese demand, which continues to bolster prices.

This development highlights growing concerns about alumina availability as the aluminium industry braces for further potential price hikes.

Later in the day, Emirates Global Aluminium (EGA) stated to Reuters that customs authorities had halted bauxite exports from its subsidiary, Guinea Alumina Corporation (GAC).

"We are seeking clarity from customs on the reason for this action and are working to resolve this as quickly as possible," EGA said.

"Production at Al Taweelah alumina refinery continues as normal, and we do not foresee any impacts from this."

Given the already tight alumina spot market, a Chinese trader noted that any development could spark SHFE prices. However, if the GAC issue is resolved in the coming weeks, its impact on alumina output is expected to be minimal. Domestic alumina consumption has remained robust, driven by increased production from aluminium producers benefiting from strong profit margins.

EGA's Al Taweelah alumina refinery produced around 2.48 million tonnes of alumina in 2023, and GAC exported 14.1 million tonnes of bauxite last year.

Chen Xinlin, a Managing Consultant at Wood Mackenzie, stated, "Alumina prices have support in the short term from a shortage of domestic Chinese bauxite supply, the high price of imported bauxite, and strong demand."