Rebellious momentum: global aluminum prices hit 10-year highs amid coup in Guinea

On Monday, September 6, world aluminum prices hit a new 10-year high.

During the trades, the price of the metal grew by more than 6.5% and at the moment rose above $ 2.78 thousand per ton.

The value was the highest since May 2011.

This is evidenced by data from the London Metal Exchange (LME).

In general, since the beginning of 2021, aluminum in the international market has increased in price by almost 40%.

Experts interviewed by RT largely attribute this state of affairs to the consequences of the coronavirus pandemic.

According to Aleksey Korenev, an analyst with Finam FG, the introduction of quarantine restrictions in a number of countries has led to a disruption in the global supply chains of a number of goods, including industrial metals.

At the same time, global demand still remains stably high, as a result of which prices rise.

“Aluminum is among the metals in demand in a number of manufacturing industries.

At the same time, metal production is very expensive due to high electricity costs, which have also risen in price recently, "Korenev explained in a conversation with RT.

In the current environment, some countries are faced with a shortage of aluminum.

First of all, the metal deficit has grown in the United States and European countries.

Anna Bodrova, a senior analyst at the Alpari information and analytical center, spoke about this in an interview with RT.

“Key stocks of the metal are located in Asia, and supplies from there are still difficult due to measures related to the spread of the COVID-19 delta strain.

At the same time, there is a consumer boom in Europe and the United States.

Aluminum is used in the manufacture of many products - from airplanes to beverage cans, ”Bodrova said.

According to experts, on Monday, the rise in prices for aluminum was further accelerated as a result of the military coup in Guinea.

So, on the eve of September 5, it became known that the rebels seized power in the African country.

The leader of the rioters, Colonel Mamadi Dumbuya, announced the overthrow of the supreme power in the republic, the arrest of President Alfa Conde, the dissolution of the government, the abolition of the current constitution, and the closure of the state's borders.

Note that Guinea is currently one of the world leaders in the production of bauxite (aluminum ore).

Moreover, today the African republic accounts for the largest share of global raw materials reserves - almost 25%.

The corresponding data are cited by the US Geological Survey.

Against this background, the armed conflict in the country runs the risk of having significant consequences for the entire world aluminum market.

This was announced on Monday by Russian businessman Oleg Deripaska.

"The aluminum market can be seriously shaken up by this situation, because 20% of the world's aluminum production uses bauxite from this small and very poor country," Deripaska wrote on his Telegram channel.

Alexey Korenev adheres to a similar point of view.

According to him, political instability in countries associated with the extraction of resources traditionally threatens with interruptions in the supply of products.

As a result, the price of aluminum in the foreseeable future is likely to continue to grow, the analyst said.

According to the US Geological Survey, the largest volume of world aluminum production is now concentrated in China.

The Asian country accounts for almost 57% of the global market.

At the same time, Russia and India (5.5% each), as well as Canada (4.8%) occupy the leading positions in the rating of the main countries - metal producers, following China.

“We see that Russia is able to provide itself with aluminum.

Therefore, for products for domestic consumption, the exchange-based rise in metal prices should not seem ", - says Anna Bodrova.

Moreover, the observed increase in world prices for aluminum can have not only a positive impact on the Russian metallurgical sector, but also on the country's budget, says Alexey Korenev.

“We have serious aluminum smelters, and of course they will benefit.

As long as the price remains high, the business will actively increase metal production.

This, in turn, should lead to an increase in tax revenues to the budget, ”the analyst concluded.