Pay attention to the | world’s second largest aluminum producer mutiny, international aluminum prices hit a new ten-year high!What is the impact on the domestic raw material market?

 Investors are concerned about the supply outlook as international aluminum prices hit a new high since 2011 on September 6, affected by domestic political turmoil in Guinea. Micro Jack Connector, Pin header and Flat Cable have big effect.

Related mining companies gained funding, Alcoa and renewable energy company Norsk Hydro) rose 5%, above its 2008 high, and Rusa rose more than 14% to a record high.

The Guinea mutiny has pushed up bauxite price.

On Sunday, the West African country of Guinea occurred.As the country with the world's largest bauxite reserves, its domestic changes have directly triggered a rise in bauxite prices.

Delivery prices of bauxite exports from Guinea to China briefly reached a high of $50.50 / ton since 18 months on Monday, up 1% from Friday, according to Asian metals estimates.Bauxite delivery prices have risen 16% this year.But the rise in bauxite deliveries stems on buyer concerns that Guinea would affect supply, but no miners have actually reported supply disruptions.

LME bauxite hit a nearly ten-decade high as aluminum-futures rose Monday.The effect also transmitted to the stock market.In international markets, shares of aluminum producers such as Norsk Hydro (Norwegian) and Rusal (Rusal) -Get Report rose, while in A-share markets, aluminum producers such as Chinalco also rose.
The Guinean military has promised not to affect mineral exports

Guinea's visit has been condemned by many countries around the world, which has put considerable pressure on Guinea's military.On Monday, Guinea military leader (Mamady Doumbouya) pledged a national transitional government and a guarantee that Guinea's mineral exports will not be cut.
Dumbuya said Guinea's maritime border will remain open so the mines can be exported.He also said the current national curfew did not apply to the mining industry."I can assure my business and economic partners that mining activities in Guinea will continue to proceed normally.We ask the mining companies to continue their activities.”
Guinea (bauxite industry expert Bob Adam) said: " The possibility of a significant short-term impact on exports is very small.September has been at the lowest point of the bauxite export cycle.”
In addition, he noted that bauxite is key to Guinea's economy and the country's major source of foreign exchange revenue, and that " any upcoming government will want to ensure that this does not jeopardize future revenues and investments.”

Bauxite is a source of economic use of Guinea

Bauxite is mainly used in the production of alumina, alumina is mainly used to extract aluminum, aluminum can be widely used in automobiles, smartphones and energy systems.International aluminum prices rose to a nearly ten-year high of $2,782 / ton in Asian trading on Tuesday, and maintained a high shock.
Guinea is rich in mineral resources, and its bauxite reserves rank first and are the world's second largest producer. The bauxite business is a key pillar of its economy and a main source of foreign exchange income.According to the country's Ministry of Mining, 88 million tonnes of bauxite were produced throughout the whole of last year.

Good resource conditions also attract a lot of overseas investment.Media statistics show that as of the first half of 2021, the bauxite projects in Guinea accounted for 35.91%, Alcoa accounted for 20.08%, Chinalco for 15.15%, UAE aluminum accounted for 13.57%, and Rusa accounted for 6.75%.
Notably, Guinea is China's major bauxite supplier, with its exports to China almost tied for first place with Australia.In 2020, the total import of bauxite was 111.587 million tons, a steady increase of 10.9% year on year, of which 52.6701 million tons from Guinea, accounting for 47.2% of the total import, an increase of 18.51% year on year.
Mining activities in Guinea are basically functioning operation

In fact, the Guinean military has indeed not had any direct impact on local mining activities such as local bauxite.According to Reuters, companies currently investing in Guinea to develop mining projects said the mining activities were not much affected.

An Chinalco spokeswoman said the company's bauxite operations in Guinea were operating normally; a spokesman for Guinea bauxite company CBG also said its mines were not affected by the turmoil.

TOP International Holdings Ltd, which owns two bauxite mines in Guinea, said business is continuing with "minimal disruption" with both bauxite stable.

Gold mining giant AngloGold Ashanti (BA) issued a statement saying it operates normally in the Siguiri (Siguiri) gold mine in Guinea.The gold mine produced 117,000 ounces of gold in the first six months of the year.

Rusa, which has three bauxite and one alumina refinery in Guinea, did not immediately respond to whether mining operations were interrupted, though said it would consider withdrawing all Russian staff if its domestic political situation continues to deteriorate.Chinalco's mines in Guinea account for 42% of its total production capacity.
However, this time raises more doubts about the future of Guinea's iron-ore project.China's Simandu Project (Simandou), the largest undeveloped iron ore project, owned by Guinea, has invested much, with Rio Tinto, Aluminum Industry of China, Yantai Port Group, China Baowu and other companies all participated in the investment.

Andrew Gadd, senior CRU Group steel analyst (Andrew Gadd), said, " It has proved difficult to find funding for Simandu, and the uncertainty over current developments will challenge the commitments involved.”

What is the impact on the domestic raw material market?

"Aluminum is one of the most optimistic industrial metals, up nearly 50% this year.News from Guinea could further increase the supply and demand gap, driven by rising supply threats, amid strong global demand growth."The Saab Bank team said in a report on Monday.

Aluminum shares of China, a state-owned company and one of the world's largest aluminum producers, rose nearly 40% Monday, with A shares rose by the daily limit.

hinalco shares ended up 5.5%, continuing a multi-month rally on rising demand in China and higher global aluminum prices.Chinalco shares are so far in 2021 as profits are expected to increase after China becomes a net importer of aluminum in 2020.

Aluminum prices have risen sharply over supply concerns since the past few months, the China Nonferrous Metals Industry Association said Monday.In the first half of 2021, China's raw aluminum output and imports were 22.89 million tons and 930,000 tons, respectively, while aluminum production and imports increased by 9.5% year on year and 167.6%, respectively.

The Shanghai Futures Exchange's daily aluminum contract Monday was 21,075 yuan a ton, down 1.5% from its previous closing price, the association said.The contract has been an extremely record high since the last few weeks, reaching $21,495 a ton on August 30.

Bloomberg (Bloomberg) reports mounting challenges for raw aluminum production at the Guangxi Aluminum Center has suffered as seasonal power tightening lead to production cuts.

Wei Lai (TF Futures Co.) -Get Report said: " A series of recent Chinese policies have affected aluminum production and boosted prices, expecting the power consumption ceiling and related policies to continue until the end of the year.Therefore, as long as the aluminum demand and supply can be maintained, then the aluminum status in the market is quite objective, and the price of aluminum is difficult to fall back.”

Many institutions continue to see more short-term aluminum prices upward trend.Goldman Sachs expects further interim aluminum gains as the global supply outlook could worsen.The Wall Street agency raised its aluminum price target to $3,200 a ton for the next 12 months.

Post time: Sep-09-2021