Aluminium rises on Guinea quota fears, oil caps gains

Aluminium rose on Tuesday as Guinea considered imposing bauxite export quotas, stoking feedstock supply concerns amid Middle East conflict-driven disruptions, though gains were capped by growth fears fuelled by rising oil.

The most-active aluminium contract added 0.14% to 25,125 yuan ($3,650.83) a metric ton as of 0255 GMT, after rising 0.64% earlier. The benchmark three-month aluminium advanced 0.63% to $3,417 a ton, after gaining as much as 0.9%.

Guinea, the world’s top bauxite producer and source of about 40% of global supply, is considering introducing export quotas for mining firms as earlier as this month, Reuters reported on Monday.

The discussions come as the Iran war enters its third week, disrupting shipments. The Gulf accounts for 8% of global aluminium but relies heavily on imported bauxite and alumina, and with only three-four weeks of raw material stocks, smelters there are vulnerable to the effective closure of the Strait of Hormuz, said Ewa Manthey, commodities strategist at ING.

A prolonged shutdown of the Strait would quickly exhaust feedstock inventories, potentially forcing further production cuts within the next one-two weeks, Manthey warned.

The conflict in the Middle East has already hit output, with Aluminium Bahrain initiating a phased shutdown of 19% of its capacity and Qatalum operating at roughly 60%.

But rising oil pricescapped gains, as Brent futures held above $100 a barrel, with countries rebuffing US President Donald Trump’s call to send warships to escort tankers through the Strait.

Copper’s recovery from Monday’s losses was also capped by inflation and growth fears. The Shanghai most-traded copper contract added 0.62% to 100,230 yuan a ton and the London benchmark gained 0.39% to $12,905.

Elsewhere on the SHFE, zinc dipped 0.33%, lead gained 1.41%, nickel rose 0.73% and tin climbed 1.96%.

Among other LME metals, zinc added 0.35% and lead rose 1.21%. Nickel and tin were little changed, up 0.06% and 0.07%, respectively.