The price of aluminum futures on the London Metal Exchange rose as much as 1.8% to $ 2,775.50 per tonne on Monday after the political outbreak in the West African country over the weekend, when a military officer issued a statement that the constitution of the nation had been dissolved. An adviser to President Alpha Conde told CNN that Conde was under arrest and that a coup had taken place.
Aluminum prices had already skyrocketed this year. The jump in metal demand has coincided with production cuts in China, which seeks to curb heavy industry carbon emissions and has been facing energy shortages.
Unrest in Guinea puts additional pressure on the market.
The country is the second largest producer of bauxite in the world after Australia. Most importantly, it supplies more than half of the ore imported from China, which is the world’s largest producer of aluminum.
“The military has closed land and air borders, so I hope this can lead to some disruptions,” said Warren Patterson, ING’s head of commodity strategy.
Eric Humphery-Smith, an analyst at risk intelligence firm Verisk Maplecroft, predicts that “operations are likely to remain closed for the next few days and possibly weeks.”
“Miners now have little choice but to stay tuned and expect more clarity from transitional authorities,” he said in a note to customers Monday.