The alumina price in the Atlantic is likely to trade at a higher premium compared with the Pacific in the near term due to refinery disruptions and high freight rates, according to Duncan Hobbs, research director at trading house Concord Resources.
A
fire in late August at the Jamalco alumina refinery, which produces 1.5 million tonnes of material per year, is costing the market 95,000-100,000 tonnes per month according to Hobbs.
Jamalco's disruption came on the heels of another one at Alumar in July where
supply was taken offline due to a damaged unloading berth.
"You've had a significant loss in supply in the Atlantic basin, a surge in dry bulk freight rates, you put those two together and that's why the premium is at multi-year high," Hobbs said.
Fastmarkets' calculation of the
alumina index adjustment to fob Australia index, Brazil was last at a $23.36 premium, its highest in three years due to the outage at Alunorte.