SMM

According to foreign media reports on November 11, after the suspension of EGA's bauxite export business in Guinea, the transportation of bauxite from GAC, subsidiary of EGA, to Chinese ports was also frozen. GAC has been striving to open negotiation corridors with the Guinean authorities.
Earlier, according to foreign media reports on October 11, EGA stated in a press release that the export of bauxite from GAC is currently suspended by customs. The freezing of ore transportation to ports indicates a further escalation of the incident. If negotiations do not progress smoothly, the possibility of mine shutdowns cannot be ruled out.
However, in the short term, the impact of this incident on the operating capacity of domestic alumina refineries is expected to be minimal, mainly due to:
1. The proportion of bauxite exported by this company to China accounts for about 6% of China's total imports, which is limited;
2. Since it takes 40-45 days for bauxite to be transported from Guinea to China, the impact of the export suspension is expected to be reflected in the imported ore port arrivals in December;
3. Recently, the profit margin of alumina has been considerable, and alumina refineries are motivated to consume part of their raw material inventory in the short term to maintain a high operating rate.
Therefore, SMM expects that in the short term, this incident will not have a very significant impact on alumina production.
However, this incident inevitably affected the total shipments of bauxite from Guinea. According to SMM data on November 8, the port departures of bauxite from Guinea's main ports were 2.0692 million mt, down 634,600 mt WoW. Since the impact of the rainy season in Guinea gradually weakened in October, another disturbance occurred, and the port departures of bauxite have not yet recovered to the pre-rainy season shipment levels. It is expected to have some impact on domestic bauxite imports in December and beyond, and the supply of bauxite is expected to remain tight in the short term.