Decade’s high aluminium amid political unrest in Guinea
Aluminium climbed to the highest in more than a decade as political unrest in Guinea fuelled concerns over supply of the raw material needed to make the metal. Guinea is a key supplier of bauxite, aluminium’s raw material, and markets are concerned about potential supply disruptions.
A unit of the military seized power and suspended the constitution, with the head of special forces, Colonel Mamady Doumbouya, urging the army to back him. That rattled global aluminium markets on Monday.
Prices for aluminum have 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. The aluminium market can be seriously shaken by the situation, United Co. Rusal founder Oleg Deripaska said. 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%.
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. 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%.