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Updated September 7th, 2021 at 14:18 IST

Military coup in Guinea: Aluminum prices hit decade-high amid concerns over bauxite export

After the military coup in Guinea over long-standing concerns about bauxite exports, aluminium prices soared to their highest level in more than a decade.

Reported by: Rohit Ranjan
Guinea
Image: @Jefferson_MFG- Twitter Image | Image:self
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After the military coup in Guinea, which erupted over long-standing concerns about the West African country's bauxite exports, the mineral required in manufacturing the lightweight metal, aluminium prices soared to their highest level in more than a decade, according to TRT World. Aluminium prices climbed in the London and Shanghai markets, while shares of the sector's leading businesses soared with industry leader Aluminum Corp of China and United Co Rusal, trading at 10% and 15% higher, respectively. In a Telegram post, United Co. Rusal founder Oleg Deripaska stated that the market might be significantly rattled. According to TRT World, prices rose 1.8 per cent to $2,775.50 a tonne on the London Metal Exchange, the highest since 2011, while it traded at $2,750 in Shanghai.

According to TRT World, JPMorgan analysts stated that the increased uncertainty surrounding the new political regime in one of the world's largest bauxite-producing countries could disrupt global commodity export flows and increase the likelihood of export contract renegotiation, putting upward pressure on alumina and aluminium prices.

Guinea is the world's leading bauxite supply, accounting for around a quarter of worldwide consumption, with China importing half of it. China generates over 60% of the world's total aluminium production. Guinean special forces launched a coup detaining the president on Sunday in the poor West African country's latest political crisis. Although the coup generated concerns about prospective production disruptions, no signs of mining or exports have been hampered so far.

China is world's largest aluminium producer

Chalco, a Chinese industry leader, has stated that all of its operations in Guinea are currently operational and have sufficient inventory at its Chinese units. Before the coup, the price of aluminium has already risen by roughly 38% in London due to a resurgence in demand. Automobiles, home appliances, and beverage cans all use lightweight metal. According to analysts at ING, Guinea supplied China with 55% of its bauxite supply in the first seven months of this year. China is the world's largest aluminium producer. Australia is the world's leading bauxite producer. 

Image Credit: @Jefferson_MFG/Twitter

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Published September 7th, 2021 at 14:18 IST

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