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Commerzbank’s Thu Lan Nguyen argues that any relief from a potential reopening of the Strait of Hormuz for Aluminium will likely be short‑lived. Guinea, which supplies 40% of global bauxite, plans to cap exports at 150 million tons, nearly 20% below last year, a move expected to support bauxite prices and, over time, Aluminium prices.
Guinea quota tightens raw material availability
“However, a reopening of the Strait of Hormuz could turn out to provide only short-term relief. Over the course of the year, a shortage is emerging in a key raw material for aluminium production: the government of Guinea, the market leader that produces 40% of global bauxite, plans to restrict its bauxite exports.”
“A maximum volume of 150 million tons is planned, which would be a cut of almost 20% compared with the previous year’s level. The aim of this measure is to support global bauxite prices and thus the margins of mining companies.”
“If the quota of 150 million tons remains in place, exports would weaken significantly over the remainder of the year, which should support bauxite prices and, in the medium term, aluminium prices. Around 35 million tons of aluminium can be produced from 150 million tons of bauxite.”
