Alumina, an intermediate product that’s processed from bauxite and fed into smelters to make aluminum, has proved to be a particularly vulnerable corner of the commodities business. In recent years, it’s been affected by everything from short-lived sanctions on Russia’s top producer to a freak rainstorm that flooded a refinery in Brazil.
Now, a fresh set of problems across the bauxite and alumina chain is sending prices soaring. Makers lacking their own captive supply are being squeezed, especially since prices for their finished product haven’t risen as quickly.
The disruptions roiling the industry show how vulnerable those global connections are, a theme consistently highlighted across raw materials since the pandemic and Russia’s invasion of Ukraine.
Alumina prices hit a record this week, surpassing levels last seen in 2018, when US sanctions on a top producer of the metal — Russia’s United Co. Rusal — threatened to bring the entire industry to a standstill.
