Haitong Futures: Guinea considers implementing tightening policies at the mining end; alumina fluctuates and rises

The rise in the spot price of alumina this time is the result of multiple factors working together. The core event is a sudden disruption on the mine side: it is understood that the government of Guinea is in talks with mining companies to limit alumina supply, with the aim of standardizing bauxite production and preventing a fall in mine prices, thereby avoiding declines in corporate revenue and government tax receipts. The government of Guinea will urge mine operators not to exceed the production levels specified in their mine plans and government agreements; however, the specific details of this policy have not yet been clarified, and official documents are still awaited. At the same time, recently the National Development and Reform Commission has issued the latest clarification on strengthening regulatory management for the alumina industry, and it supports extracting lithium and metallic gallium from alumina—overall, the policy stance is more favorable. Fundamentally, in the near term, shipping freight rates have risen due to developments in the Middle East, bauxite prices have rebounded somewhat, and support from the cost side has increased. On the supply side, aside from the shutdown of the second phase of a project at a previously mentioned northern alumina plant, some companies in Guizhou and Guangxi are still moving ahead with maintenance and production cuts; however, a newly commissioned project in Guangxi may gradually start up its first production line, offsetting the impact of the maintenance. During the week, domestic inventories continued to accumulate, reaching 5.77 million tons, and warrant inventories also remained at a high level. In the short term, under the support of Guinea’s mine-side policy and the rise in costs, the next period’s price may continue to trade in a volatile but slightly bullish range. However, with inventories staying high and no turning point yet appearing, there is still pressure. The level around 3100 should be watched for performance on the upside, and going forward, continue to track the execution of Guinea’s policies, geopolitical developments, and changes in domestic production capacity and inventories. (Haitong Futures)