Shanghai aluminium near 13-year high as Guinea unrest stokes supply woes

Shanghai aluminium prices held near their highest in more than 13 years on Wednesday amid trader concerns over possible supply disruption from major bauxite producer Guinea and tightness in top consumer China on logistics constraint.

Guinea is China's biggest supplier of bauxite, an ore used to produce aluminium.

The most-traded October aluminium contract on the Shanghai Futures Exchange was up 0.8% at 21,910 yuan ($3,390.22) a tonne, as of 0447 GMT, and holding near its highest level since July 2008 of 21,980 yuan a tonne scaled on Monday.

Three-month aluminium on the London Metal Exchange rose 0.7% to $2,775.50 a tonne, hovering near its 10-year high levels hit on Monday of $2,782 a tonne. The contract has climbed 40% so far this year and is the second-best performer among the LME base metal complex after tin.

Aluminium prices for months have been supported by supply disruptions in top producer China, while the latest price rally was boosted by the political turmoil in Guinea, despite no immediate impact has been reported.

"Everyone is trying to get the earliest ship to avoid clashing with arriving just prior or during the National Day break, which results in unnecessary rental and delivery delays," a Singapore-based trader said, adding that the Guinea unrest also boosted prices.

The coup on Sunday, in which President Alpha Conde and other top politicians were detained or barred from travelling, is the third since April in West and Central Africa, raising concerns about a slide back to military rule.

Chinese markets will be closed during Oct. 1-7 for a holiday.

Aluminium inventories in ShFE warehouses were last at 232,245 tonnes, their lowest since December 2020. "By the end of this week, I think the flurry of (shipping) activity will die down," the trader said.

• LME copper fell 0.2% to $9,331 a tonne, nickel climbed 0.6% to $19,620 a tonne, ShFE nickel increased 0.6% to 146,940 yuan a tonne, while copper edged down 0.5% to 69,000 yuan a tonne.

• Global copper smelting activity was subdued in August as plants mainly extended maintenance shutdowns, while flooding and power restrictions also had an impact, data from satellite surveillance showed on Tuesday.