LONDON (Reuters) – Alumina is having a turbulent year. The intermediate product sitting between bauxite and refined metal on the aluminium production chain doesn’t normally grab the headlines.
But it did in April, when the spot price doubled to over $700 per tonne as the market reacted to U.S. sanctions on Oleg Deripaska and his Rusal empire.
The sanctions threw into doubt the future of Rusal’s Aughinish alumina plant in Ireland, threatening a second blow to global production after the part closure of the Alunorte refinery in Brazil.
Aughinish won a reprieve as the U.S. Administration extended the sanctions deadline and the betting is that a political deal to lift the sanctions altogether will be achieved very shortly.
However, while the aluminium price is now trading back at pre-sanctions levels, that of alumina isn’t. Alunorte remains part suspended and Chinese alumina refineries have started cutting production. The latter may be a sign of things to come, promising further turbulence ahead.