According to a research report, Guinea is reportedly in discussions with mining companies to control bauxite production in an effort to curb declining raw material prices. The policy aims to regulate bauxite production and plans to reduce bauxite exports before April. From a profitability perspective, although the U.S.-Iran conflict has led to reduced demand for alumina due to aluminum smelter shutdowns, rising global freight costs resulting from the conflict have driven up bauxite prices. This may push alumina prices higher due to increased costs. Considering the U.S.-Iran conflict and Guinea's tightening mining policies, aluminum, energy, and alumina prices are expected to rebound. It is recommended to focus on aluminum producers with high self-sufficiency in power and alumina. Key points are as follows:
Guinea's policy direction toward reducing bauxite volume and raising prices is clear, which may lead to a reversal in alumina prices. Under Guinea's policy, the government will urge mining companies not to exceed agreed production levels, aiming to align 2026 production and export volumes with feasibility study outlines. Although the specific reduction ratio remains to be seen, the trend of volume reduction and price increases is undeniable, suggesting potential upward momentum for bauxite and alumina prices.
Three factors may drive alumina prices to recover. From a profitability standpoint, widening losses in the alumina industry could trigger supply contraction and stimulate price rebounds. Although the alumina market remains oversupplied, sustained cash losses are unsustainable. If companies cut production due to losses, supply reductions may quickly push prices higher. Additionally, while the U.S.-Iran conflict has weakened alumina demand due to aluminum smelter shutdowns, rising global freight costs have increased bauxite prices, potentially lifting alumina prices through cost pressures.
From an anti-overcapacity perspective, stricter controls on alumina capacity may reshape the market and drive price normalization. Efforts to curb overcapacity in the alumina industry focus on strengthening management and optimizing layout, which could suppress long-term supply and reshape supply-demand dynamics.
Guinea's mining policy changes may drive bauxite and alumina prices upward. Guinea plays a significant role in global bauxite supply. According to CRU and Chinese customs data, Guinea accounted for 40.6% of global bauxite production in 2025 and 74.3% of China's bauxite imports. Changes in Guinea's mining policies may tighten global bauxite supply, stimulating price increases.
Recommended stocks include Nanshan Aluminum International, China Hongqiao, Aluminum Corporation of China Limited, Tianshan Aluminum Group Co., Ltd., Shandong Nanshan Aluminium Co., Ltd., and Hebei Huatong Wires & Cables Group Co., Ltd. Risks include sharp fluctuations in product prices, less stringent-than-expected policies in Guinea, and easing tensions in the Middle East.
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