Alcoa declares force majeure on Juruti bauxite supply in Brazil, raising global supply concerns

Alcoa declared Nov. 6 a force majeure on supplies from its Juruti bauxite mine in Brazil that will impact its ability to supply the raw material to buyers, the company confirmed late Nov. 7, in a development that could further tighten alumina supplies as other key global locations struggle with production.

The force majeure was invoked on bauxite supplies from the "Juruti Port in Brazil due to the Santarem Harbor Master declaring the waterway inoperable due to a stranding of a ship in the terminal access channel," the company said in an email statement.

Aloca said the situation was beyond the company's control but it does impact its "ability to supply our customers."

The company did not provide any timeline on when shipments could resume from the port.

"We are carefully monitoring the situation and are providing updates to customers as we stay in close contact with the Navigation Authority to understand the salvage plan process and its impact on our future shipments," Alcoa said.

The force majeure comes at a time when global alumina supplies are tight because of multiple output curbs, shutdowns and tight supply of raw material bauxite, which has propelled alumina prices to multiyear highs.

"We are currently unable to get ships to the berth, which means we're not loading any bauxite," a source based in the Atlantic region said Nov. 7.

One China-based source said the force majeure could affect the Alumar refinery in Brazil. The resumption of shipping depends on when the navigation authority opens the channel, he said.

A US-based producer also said that blocking of the water route could be an issue for Alumar.

Data from S&P Global Commodities at Sea showed the bulk carrier Rose chartered by Alcoa was "not under command" and was stranded near a bauxite terminal at Juruti port. "Not under command" typically refers to a ship that is unable to maneuver due to exceptional circumstances and could restrict movement of other ships.

Rose departed from the Juruti port Oct. 28, and was bound for the Vila do Conde port, which receives bauxite transported to the Alumar refinery, according to CAS data. The refinery is owned by Alcoa, while South32 and Rio hold minority stakes.

With resources and reserves of more than 700 million mt, Juruti has one of the world's largest deposits of high-grade bauxite, according to S&P Global Market Intelligence data. Its production is directed to the Alumar refinery.

Alumina prices at record highs

Alumina prices have soared to multiyear highs as the sector navigates multiple supply choke points.

Platts, part of S&P Global Commodity Insights, assessed the benchmark daily Australian alumina steady at $723/mt FOB Nov. 7, up $373/mt since the start of 2024 and the highest level since Platts started the assessment in August 2010.

China, which has turned into a net exporter of alumina this year and is playing a critical role in meeting the supply-demand gap globally, is also witnessing a jump in alumina prices. China is also the world's largest alumina producer.

China's alumina futures prices continued to increase Nov. 8, boosted by the Juruti disruption. Prices have been rising over the past few months amid tight bauxite supply, refinery maintenance works in the country and strong downstream demand.

The most active alumina futures price listed on the Shanghai Futures Exchange rose to as high as Yuan 5,350/mt during intraday trade Nov. 8, marking a 2.9% increase from the previous day and 24% higher from the previous month, exchange data showed.

A lack of clarity on talks over unresolved bauxite and alumina issues in the Republic of Guinea and India are the main bullish factors recently, sources said, adding that anxiety over the near-term supply picture meant limited respite for prospective buyers.

Supply from Guinea, the largest bauxite supplier to China, has been hit by disruptions in recent months, firstly due to unfavorable weather conditions and an earlier oil terminal explosion, and now due to exports by Guinea Alumina Corp. being blocked by customs authorities.

China heavily relies on imports of bauxite, a raw material which is further processed into alumina. About 67% of its domestic consumption in 2024 came from imports, according to state-run research agency Antaike.

Operations at two key alumina refineries in Australia are expected to face operational hurdles due to a breakdown of the third-party-operated Queensland Gas Pipeline until the end of this year, Rio Tinto said in its quarterly report.