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Since the start of the year the alumina price has surged, with levels to date rising 71%. The more recent escalation in prices was initially driven by market tightness caused by the force majeure at Hydro’s Alunorte alumina refinery. This occurred when Hydro was ordered to operate Alunorte at 50% of its capacity in late February amid concerns that severe rainfall in Brazil’s northern state of Pará had resulted in water contamination.
With Wednesday’s price gains taken into account, alumina prices have risen 92.21% since March 1, with the force majeure declared by UC Rusal accentuating already-emerging tightness and taking out the option for a substitute to Hydro material in the Atlantic.
With ongoing uncertainty in the market regarding supply, prices have surged, with distressed buyers paying significant premiums on previous transactions in order to secure cargoes.