Reports of Guinea Unrest Send Aluminium Prices To 10-year High

Related stories

Drama as 16, 17-year-olds Now Allowed to Vote In UK Elections

By Abiola Olawale  The government of the United Kingdom announced...

Brazil’s Petrobras Weighs Return to Retail Fuel Market to Reduce Prices

Brazil’s Petrobras will discuss this week tweaking its mid-to-long-term...

Base Handover: France Ends Decades-Long Military Presence in Senegal

By Abiola Olawale France on Thursday officially ended its 65-year...

Aluminum climbed to the highest in more than a decade as political unrest in Guinea fueled concerns over supply of the raw material needed to make the metal.

A unit of the military seized power and suspended the constitution, with head of special forces, Colonel Mamady Doumbouya, urging the army to back him. That rattled global aluminum markets Monday — prices in London notched a fresh 10-year high and futures in China climbed to the highest since 2006 — as the political instability raises the possibility of disruptions to bauxite shipments from the key global supplier.

Aluminum has climbed about 40% this year in London as massive global stimulus measures stoked demand just as smelters in China, the biggest producer, struggled to maintain output during a seasonal power crunch and Beijing sought to rein in the country’s carbon emissions. Bauxite is the feedstock used to make alumina, which is further processed into aluminum, and Guinea accounts for more than half of all of Chinese imports.

The market “can be seriously shaken” by the situation, United Co. Rusal founder Oleg Deripaska said in a Telegram post.

Prices on the London Metal Exchange rose as much as 1.8% to $2,775.50 a ton, the highest since May 2011, and traded at $2,750 by 11:24 a.m. in Shanghai. In China, futures jumped as much as 3.4% to the highest since 2006, before paring gains to 1.8%.

“Investors are quite concerned given China buys a big chunk of bauxite from Guinea,” though there haven’t been reports of disruptions yet and the extent of any impact will depend on how the situation evolves, said Xiong Hui, chief aluminum analyst with Beijing Antaike Information Development Co.

Aluminum Corp. of China, the biggest producer and which has a bauxite project in Guinea, said all of its operations are normal and it has ample bauxite inventories at its plants in China. Shares in Hong Kong climbed as much as 10%.

Investors are also looking at ongoing production cuts in China’s Guangxi province, which is further tightening the market, Hui said.

The energy-intensive aluminum industry has come under increased scrutiny as part of Beijing’s pollution crackdown. China produces around 60% of the world’s total, with concerns around output prompting some of its largest smelters to pledge to ensure supply, and metal to be released from state reserves to ease tightness. The country has become increasingly reliant on imports, a rare development that’s drained global supplies of the usually abundant metal.

Aluminum, used in everything from car parts to drinks cans and home appliances, fared particularly badly at the onset of the pandemic, but is now enjoying a strong resurgence as consumer demand and economic activity bounces back. Longer-term, the metal is set to benefit from its use in electric vehicles and renewable energy.

The rally is creating a huge windfall for producers who’ve been plagued by weak prices for years, and have often been pumping out metal at a loss. But the gains over the past year are adding further fuel to concerns over inflation as manufacturers increasingly look to pass on costs to consumers.

SOURCE: BLOOMBERG

Hamilton Nwosa
Hamilton Nwosa
Hamilton Nwosa is an experienced, and committed communication, business, administrative, data and research specialist . His deep knowledge of the intersection between communication, business, data, and journalism are quite profound. His passion for professional excellence remains the guiding principle of his work, and in the course of his career spanning sectors such as administration, tourism, business management, communication and journalism, Hamilton has won key awards. He is a delightful writer, researcher and data analyst. He loves team-work, problem-solving, organizational management, communication strategy, and enjoys travelling. He can be reached at: hamilton_68@yahoo.com

Subscribe

- Never miss a story with notifications

- Gain full access to our premium content

- Browse free from up to 5 devices at once

Latest stories

NDN
Latest News
2027: Buhari’s exit Cripples APC in entire North as CPC Loyalists Defect in Large NumbersDrama as 16, 17-year-olds Now Allowed to Vote In UK ElectionsSenate passes $9 billion in spending cuts to public broadcasting, foreign aid requested by TrumpBrazil’s Petrobras Weighs Return to Retail Fuel Market to Reduce PricesBase Handover: France Ends Decades-Long Military Presence in Senegal5 Oil Titans Who Revolutionized the Energy Sector2027: Dele Momodu dumps PDP for Coalition party, ADCBuhari's Honour: Tinubu holds special FEC session as Nigerians Mourn late Hero, Statesman. First Bank Crisis: In High-Stake Intrigues, Otedola Seizes Control with 40% Stake as Oba Otudeko Exits in N324.47bn DealElderstatesman, Emeka Anyaoku, Speaks Again , Urges Nigeria to Adopt a "People’s Democratic Constitution""Nigeria's challenges not about the constitution, but its operators", says ObasanjoNigeria Surpasses OPEC’s 1.5 Million Barrel Oil Quota in June 2025Natasha vs Akpabio: Senate President Heads to Court, Challenges Court Order to Reinstate SenatorOluwo Commends Awujale's Burial, Says Late Monarchs Shouldn't Be "Butchered Like Animals"Alleged N6.9Billion Fraud: Drama as Ex-Governor Fayose Wins in Court
X whatsapp