Alumina price hits all-time high as US sanctions hit Aughinish refinery
“It’s a holy sh*t price,” one trader said of the rise above $700
Alumina is a key ingredient in the manufacture of aluminium. Photograph: Reuters
The price for alumina, a key ingredient for making aluminium, has surged to an all-time high above $700 (€565) a tonne following US sanctions against producer Rusal, which owns Europe’s largest refinery.
Traders said the price jump is a sign of panic in the market, as aluminium smelters look for alternative supply of the key material. One trade for alumina hit as high as $800 a tonne Wednesday, they said.
“It’s a holy sh*t price,” one trader said. “Panic [is]setting in.”
The US sanctions have cut Rusal off from global markets and left buyers of its alumina unable to continue with their contracts. Rusal owns the Aughinish refinery in Co Limerick, which employs 450 workers.
Alumina prices have leapt as much as 80 per cent since the announcement of sanctions, which will drive up the cost for aluminium producers.
The April 6th sanctions on Rusal and its founder Oleg Deripaska have thrown the fate of the Aughinish refinery into doubt.
Rio Tinto, which supplies bauxite to Aughinish, said last week it was in the process of declaring force majeure on its contracts with Rusal, which also owns alumina refineries in Ukraine and Italy as well as a number in Russia.
The price for aluminium also jumped Wednesday, rising 5 per cent to hit its highest level since 2011. Nickel prices jumped by 10 per cent in their biggest one-day move since 2008. – Copyright The Financial Times Limited 2018