CRU’s Alumina Price Index (API, Australia FOB) increased on 31 October 2024 to reach $702.50 /t, double the level compared to the start of this year. This is the highest nominal alumina price reported by CRU in over 35 years of alumina price reporting. Additionally, CRU’s China Alumina Basket Price have breached the RMB,5000 /t level for the first time. The alumina price rise has been attributed to global alumina production disruptions, tightness in China and disruption to Guinea bauxite shipments.
Market participants in China are also expecting prices to increase further amid bauxite sourcing concerns. Emirates Global Aluminium (EGA) is seeking clarity from customs authorities after bauxite exports were halted for its subsidiary Guinea Alumina Corporation (GAC). The bauxite industry in Guinea has contended with several challenges in the past, including the military coup in September 2021 and a major oil terminal explosion in December 2023. However, this has not stopped the country establishing itself as the world’s largest bauxite producer, previously surpassing Australia.
From an alumina market fundamental perspective, the spotlight has been on Australia and India this year in terms of several alumina production disruptions. CRU currently expects Australian alumina production to total 17.2 Mt in 2024, which is down 9.9% y/y. The full curtailment of Alcoa’s 2.2 Mt/y Kwinana plant was completed in 2024 Q2, and Rio Tinto’s force majeure on Gladstone shipments has been ongoing.
Elsewhere, anticipated refinery expansions have been slow to materialise. Vedanta recently reported alumina production at its Lanjigarh refinery in India at 499 kt in 2024 Q3. This is down 7.4% q/q despite the company previously commissioning the first phase 1.5 Mt/y expansion of its refinery.
This is all amid a background of rising primary aluminium production (and alumina consumption). World ex. China and Chinese aluminium production is set to increase y/y by 1.5% and 2.8% respectively in 2024.
It is worth noting, the current skyrocketing nature of alumina prices follows several years of alumina prices lingering at low levels and the plight of loss-making capacity prior to the current period. Alumina prices have since increased substantially, albeit exceeding initial expectations. The extent that alumina prices retreat next year will likely depend on the timing of expansions and bauxite availability. However, for this year, alumina has taken its place as the hottest commodity.
