(Bloomberg) -- Alumina futures in Shanghai spiked to a record as global supply disruptions and resilient Chinese demand continue to tighten the market of the main feedstock for aluminum smelters.
Alumina jumped 4.2% to close at 4,553 yuan ($644) a ton on the Shanghai Futures Exchange on Friday, the highest since the contract debuted in June 2023. Aluminum climbed 1.4% to $2,621.50 a ton on the London Metal Exchange as of 8:52 a.m. local time, leading gains among industrial metals.
Prices have rallied over the past year due to problems with supply in both China and Australia, as well as record Chinese aluminum output. The latest move higher may also have been triggered by reports of a supply interruption in Guinea, one of the world’s top suppliers of bauxite, a key raw material for alumina.
Researcher Mysteel Global said on Friday that shipments of bauxite from a mine in Guinea may have been disrupted, without giving details.
In January, Alcoa Corp. said it will shut its Kwinana alumina refinery in Western Australia. In May, Rio Tinto Group declared force majeure on cargoes from its refineries in Queensland, Australia, because of gas shortages. 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.
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