Yahoo Finance Aluminum Jumps as EGA Says Bauxite Exports Suspended in Guinea
(Bloomberg) -- Aluminum prices jumped more than 2% in London after a key supplier of the mined ore needed to make the metal said exports from its operations in Guinea had been suspended.
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Emirates Global Aluminum is seeking clarity from customs authorities in Guinea after exports of bauxite were halted, the company said in a statement. The raw material is fed to refineries who make an intermediate product called alumina, which is then smelted into pure aluminum. Alumina futures in Shanghai also hit the highest since contracts were launched in June 2023.
Emirates Global said its alumina refinery in Abu Dhabi is still operating as normal, and the company does not expect output to be impacted by the export halt.
The stoppage follows on from several supply curtailments that have roiled the alumina market this year, at a time when Chinese aluminum smelters are pumping out record volumes of finished metal. Alumina prices have surged, and leading metals trader Trafigura Group last month said the commercial strain that the rally is placing on smelters is the most important dynamic driving the outlook for aluminum prices.
Supply disruptions have been stacking up since January, when Alcoa Corp. said it will shut its Kwinana alumina refinery in Western Australia. In May, Rio Tinto Group also declared force majeure on cargoes from its refineries in Queensland, Australia, because of gas shortages. And in China, alumina supplies have been constrained by a shortfall of bauxite amid environmental inspections.
Chinese alumina producers have boosted output to take advantage of the strong market. Some 6.4 million tons of new capacity is due to come online next year, which could take the shine off prices, according to Bloomberg Intelligence. China’s total capacity stood at 104 million tons as of June, according to Aluminum Corp. of China Ltd.
Aluminum prices jumped as much as 2.7% to $2,655 a ton on the London Metal Exchange and were trading at $2,648.5 a ton as of 11:19 a.m. local time. Most metals were higher, with copper up 0.3% and nickel climbing 1.4%. Alumina jumped 4.2% to close at 4,553 yuan ($644) a ton on the Shanghai Futures Exchange on Friday.
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