Alumina Prices Hit Record High Amid Supply Challenges

The price of alumina, a crucial raw material for aluminium production, has reached a record high of $707.59 per tonne. This surge is attributed to ongoing supply and production issues in major exporting countries like Guinea, Australia, and China, as reported by ZeroHedge.

In Guinea, a leading supplier of bauxite, challenges in foreign trade and ongoing negotiations with customs authorities have caused instability in exports. Similarly, in Australia, another major producer of bauxite and alumina, climate change policies and reduced natural gas consumption have hindered raw material exports. These supply constraints are contributing to the elevated cost of alumina.

UBS analysts predict that these factors will continue to influence the aluminium market through the end of the year. Despite these challenges, a reduction in metal production is not currently seen as the most likely outcome.

Additionally, ZeroHedge suggests that if large-scale measures to support China's economy are introduced, the supply issues could worsen. China remains the world’s largest consumer of raw materials for aluminium production, and changes in its economic policies could further impact global market dynamics.