The recent political upheaval in Guinea may affect freight rates of Capesize vessels in the region over the next few weeks, but the impact may not be sustainable in the long term due to the Chinese clout in West Africa. This is according to Rahul Sharan, lead research analyst dry bulk at maritime agency Drew r y.Ongoing political turmoil in Guinea worsened when armed forces toppled the 11-year-old regime in early September, increasing uncertainty around bauxite mining and supply chain activities. Speaking during a recent online event, Sharan said there was no certainty that the country’s dry bulk shipping activities would continue smoothly. Bauxite generated 4.5% of the total global dry bulk shipping demand (tonne miles) in 2020, of which 72% was generated by Guinea alone.According to Sharan, Guinea has become the largest bauxite supplier globally, leaving other major exporters like Australia and Indonesia far behind. Over the same period, China has strengthened its position as the largest bauxite impor ter. “The entire increase in global bauxite trade over the past five years has completely been sucked up by China as it was left with almost no option in the wake of the ongoing dispute with Australia, and Indonesia’s decision to restrict exports of unprocessed minerals and ores.”In the meantime, prices of bauxite from Guinea hit an all-time high in early September as buyers raised concern over supply following the coup in the West African country.Sharan said it remained unclear to what extent – if any – the unrest in the county had impacted on bauxite operations.“The transition of power in Guinea might delay the mining operations, forcing disruptions in bauxite loading and affecting the trade on the Guinea-China route.”He said a decline in trade would affect Capesize freight rates in the region as the bulk of exports were on Capesize vessels.Sharan, however, emphasised that a drop in volume was a concern as Guinea exports seasonally declined in the third quarter every year. “The added pressure of the political unrest could see volumes drop lower than what is usually the case and this would further squeeze the demand for bigger vessels. "Guinea has become the largest bauxite supplier globally, leaving other major exporters like Australia and Indonesia far behind.– Rahul Sharan
