Leading Futures: The multi-party game has concluded; Guinea will announce bauxite quotas, and alumina surged in the afternoon

Although Guinea’s bauxite export restriction policy has already been implemented, it still has not been carried out in practice, and various parties remain engaged in a game of negotiations. Alumina prices have quickly dropped from around 2900 yuan to between 2700 and 2800 yuan. Today, alumina continued to fluctuate and consolidate in the 2700–2800 yuan range in the morning. In the afternoon, market news came that Guinea’s Ministry of Mines plans to release detailed documents next week regarding the issue of bauxite quotas. Fueled by this news, alumina prices surged rapidly, reclaiming levels above 2800 yuan, with a gain of more than 2%.

Based on past information, a large amount of bauxite has already been completed for export over the first five months. If, according to the Guinea government’s target, export restrictions are set at 150 million, then in the second half of the year exports will be tightened significantly, which would be a more noticeable positive for alumina—at least, there is strong support from below. However, if this is adjusted to be treated as a one-year period, from June this year to June next year, then the tightening in supply would be somewhat eased. In fact, bauxite export volume is closely related to Guinea’s revenue. With multiple parties negotiating, it is not ruled out that there may be some minor adjustments. We need to wait for the specific quotas to be implemented; for now, the market mainly rebounds from low levels. (First Capital Futures)