Aluminum Output Cuts May be Coming After Bauxite, Alumina Prices Surge -- Market Talk

0015 GMT - Some aluminum smelters could be forced to cut back on production as margins are eroded by fast-rising raw materials prices, says Commonwealth Bank of Australia analyst Vivek Dhar. While the price of aluminum on the London Metal Exchange has jumped by roughly 17% over the past year, outperforming most other base metals, prices for alumina and bauxite have surged because of supply disruptions. Bauxite is up roughly 54% in the last year, while alumina has more than doubled, says Dhar. "All in all, the sharper rise in seaborne alumina prices relative to aluminum prices means margins have eroded further for aluminum smelters dependent on imported alumina," he says. "This has the potential to see smelters curtail output if current dynamics persist." (rhiannon.hoyle@wsj.com; @RhiannonHoyle)


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11-29-24 0843ET