The prices of aluminium hit a 10-year high right after the coup in Guinea, the world’s major supplier of bauxite which is used for the production of aluminium, amid concerns over the possible disruption of the supply.
Aluminium prices climbed to their highest in more than a decade after the coup in Guinea unfolded over long-standing concerns about the west African country’s exports of bauxite, the mineral used in the production of the lightweight metal.
In the London and Shanghai markets, the prices of aluminium rose after the coup and the shares of the sector’s leading companies jumped, while the industry leader Aluminum Corp of China (Chalco) and United Co Rusal were traded at 10 percent and 15 percent higher, respectively.
United Co. Rusal founder Oleg Deripaska said that the market “can be seriously shaken” in a Telegram post.
Prices increased 1.8 percent in the London Metal Exchange to $2,775.50 a ton, the highest since 2011, while it traded at $2,750 in Shanghai.
“The increased uncertainty around the new political regime in one of the world’s largest bauxite-producing countries may disrupt global commodity export flows and also raises the likelihood of export contracts renegotiation, which may put upside pressure on alumina and aluminium prices,” said JPMorgan’s analysts.
Guinea is the key global supplier of bauxite, which is about a quarter of the world’s demand, and half of it is imported by China.
China produces around 60 percent of the world’s total aluminium output.
Guinean special forces have staged a coup on Sunday, arresting the president, in the latest political upheaval to roil the impoverished west African country.
Although the coup raised concerns over the possible disruption of the production, so far there is no sign of mining or shipments have been affected.
Chinese industry leader Chalco has said all of its operations in Guinea are currently continuing and it has enıugh storage in the inventories at the plants in China.
The price of aluminum has already increased about 38 percent in London before the coup, as the demand rebound.
The lightweight metal is used in the automobile sector, home appliances, and drink cans.
Guinea’s president Alpha Conde was detained Sunday by soldiers led by an army colonel, who announced the move on state television.
Conde is accused of personalising politics and not doing enough to improve the people’s economic and social conditions.
Conde, 83, was re-elected for a third term in October 2020 in polls marred by violence.
He first came to power in 2010 in a vote seen as the first democratic election since the former French colony gained independence.
Source: TRT World