China alumina prices hit record high on Guinea bauxite supply concern
By Mai Nguyen and Hadeel Al Sayegh
HANOI/DUBAI, Oct 11 (Reuters) -Prices of alumina on the Shanghai Futures Exchange jumped more than 6% to a record high on Friday on concerns of bauxite supply disruption from Guinea amid an already tight market.
Later in the day, Emirates Global Aluminium (EGA) said bauxite exports from its subsidiary Guinea Alumina Corporation (GAC) are suspended by customs.
Bauxite is refined into 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 and we do not foresee any impacts from this," it said.
The most-traded November alumina contract on the Shanghai Futures Exchange SAOcv1 surged as much as 6.4% to 4,630 yuan ($655.20) a metric ton, a record high since the contract was launched in June.
The contract eased later in the session, but closed 4.6% higher at 4,553 yuan a ton.
The statement was issued after the SHFE was closed.
The refinery produced 2.48 million tons of alumina in 2023 and GAC exported 14.1 million tons of bauxite last year, EGA said on its website.
Guinea is the world's No.2 bauxite producer, after Australia.
"Any news could ignite SHFE 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 profit.
"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 4,214 yuan a ton on Thursday, according to Shanghai Metals Market data published on LSEG Workspace.
The price has surged 35% this year and is set for a fourth straight yearly gain.
($1 = 7.0665 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
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