The latest alumina tender by India's National Aluminium Co. (532234.BY), or Nalco, has gone for over a third higher than the last as participants stock up on the raw material due to a strike in Guinea, market sources said Tuesday.
Switzerland's Glencore International SA won the tender with a bid of $352.73 a metric ton, which attracted bids from a total of six market participants, market sources told Dow Jones Newswires. Glencore wasn't available for comment.
The tender is for a cargo of 30,000 tons of alumina to be shipped in the first half of February. The last Nalco tender under a fortnight ago went for $262/ton, market sources added, some 35% lower.
Two other market participants bid over $300/ton while the rest - including a Chinese player for the first time in months - were in the high $200s, market sources said.
The competitive bidding comes as Guinea remains gripped by a general strike aimed at toppling Lansana Conte, the country's long-ruling president. Conte seized power in a 1984 coup and has refused to step down in spite of rumors of ill-health.
The strike has seen production of bauxite, a key ingredient to make alumina, halted at Alcoa Inc.'s (AA) CBG operations, the country's main producer. Alumina output at Russian Aluminum's Friguia refinery has been cut by less than 10%.
Although these companies say alumina supplies to their aluminum smelters won't be affected, industry participants said the market is concerned that the Guinea strike situation could escalate further.
Guinea contains 30% of the world's bauxite reserves and accounts for 94% of its African production. Four tons of bauxite make two tons of alumina, which in turn is smelted to produce one ton of aluminum.
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