Aluminium prices surged in London on Friday as supply disruptions from Guinea, a significant exporter of raw materials, raised concerns about further tightening in the alumina market. Alumina is a critical ingredient used in aluminium production.
Emirates Global Aluminium (EGA) reported that exports of bauxite, the primary raw material for alumina, from its subsidiary Guinea Alumina Corporation (GAC) were suspended by customs. The company stated that it is seeking clarification on the reasons behind the suspension.
The three-month aluminium price on the London Metal Exchange (LME) increased by 2.2%, reaching $2,641 per metric ton by 1615 GMT. Meanwhile, alumina prices on the Shanghai Futures Exchange (SHFE) reached a record high. China, the world’s largest aluminium producer and metals consumer, has grown more dependent on Guinean bauxite in recent years.
Julius Baer analyst Carsten Menke noted that supply disruptions along the alumina and bauxite value chain have been frequent this year. These disruptions have pushed up prices and made traders cautious.
StoneX analyst Natalie Scott-Gray highlighted that bauxite exports from Guinea, which account for 70% of global seaborne exports, have risen 23% so far this year. This increase is mainly due to higher output from Guinea Alumina Corporation, which exported 14 million tons of bauxite last year.
In related metals news, copper prices also rose in London on Friday. However, copper is on track for its most significant weekly decline in five weeks as a recent price rally has impacted physical demand, and inventories in China, the top consumer, have increased.
The LME copper price rose 0.8% to $9,797 per ton, supported by the 21-day moving average at $9,726. Despite this rise, the contract was down 1.5% for the week so far.
