LONDON, Sept 11 (Reuters) – The alumina price is on a charge again.
The CME cash contract, indexed against Platts’ assessment of the Australian price, is currently quoted at $626 per tonne, just shy of the record $643 seen at the start of May.
In China spot prices are at their highest since December last year, according to Shanghai Metals Market.
A walk-out by unionised workers at three Australian alumina refineries has injected yet more uncertainty into an already problematic supply equation.
What has historically been a highly efficient part of the aluminium production chain is experiencing an unprecedented degree of turmoil this year.
There is the potential for short-term relief if the strike at AWAC’s facilities ends and Norwegian producer Hydro can persuade the Brazilian authorities to allow full operations at its Alunorte refinery.
However, a looming deadline for the lifting of sanctions on Russian producer Rusal is fast approaching and China’s alumina production sector is being rocked by environmental crackdowns.
It seems unlikely that the supply disruption premium is going to unwind fully any time soon.
That in turn poses hard questions for aluminium smelters, given the impact of such a high input price on operating margins.
Graphic on CME and Chinese alumina prices: