Aluminum Jumps as Guinea Coup Adds to Supply Worries
Aluminum surged to the highest since 2008 as political turmoil in Guinea added to worries about tightening supply at a time when demand is booming.
The metal rallied as much as 1.8 per cent in London, and is now up about 90 per cent from lows struck in April last year amid a global economic recovery and a supply squeeze in China. On Sunday, a military unit seized power in Guinea, destabilizing the African nation that’s a key source of bauxite used to make aluminum.
Even before the political turmoil in Guinea, analysts said prices look set to breach record highs above US$3,300 a ton as a global deficit deepens. That’s largely due to massive global stimulus measures stoking demand, Chinese smelters struggling to maintain output during a seasonal power crunch, and Beijing’s moves to rein in the industry’s carbon emissions.
Aluminum rose 1.8 per cent to US$2,807 a ton on the London Metal Exchange by 9:21 a.m. in New York.