The FYI Resources Ltd (ASX: FYI) share price has jumped 1.8% higher on Wednesday morning, up 12.8% in the past week. Here's why shares in the Aussie alumina group are soaring right now.
Why the FYI Resources share price has surged 13% in a week
Let's start with what FYI Resources actually does. The company describes its focus as "developing an innovative and vertically integrated high quality, high-purity alumina for use in various high growth tech applications".
Essentially, FYI is focused on the exploration and evaluation of potash projects in South East Asia. That exposure to alumina, however, is proving to be a winner in 2021.
The May 2021 agreement with Alcoa Australia to enter an exclusivity agreement to facilitate negotiations of a high purity alumina project joint venture has certainly helped.
FYI subsequently completed its due diligence and extended the agreement by a month. The promising developments have been enough for shareholders to jump on board. Subsequent buying has bid up the FYI Resources share price this year to its current level.
The FYI Resources share price is flying, having surged 198% higher this calendar year. Shares in the ASX resources share were just shy of a 13-year high this morning before settling 0.61% lower to 81.5 cents at the time of writing.
What about commodity prices?
The key here has been recent gains in global alumina prices. According to the London Metals Exchange, LME Alumina (CRU/Fastmarkets MB) is changing hands for US$378.41 per tonne right now.
That represents a more than 25% gain since the August 31 price of US$302.24 per tonne. The FYI Resources share price has been charging higher this year and the underlying commodity price has had a big hand in that.
It's been a similar story for Alumina Limited (ASX: AWC). Alumina shares have gained 47.9% in the past year in line with the strong commodity demand.
Foolish takeaway
The FYI share price has even had some double-digit, single-day increases in 2021. For instance, on 9 August, shares in the ASX resources group jumped 22% higher despite no news.
Shares in the alumina company are trending up today and are now up 12.8% in the past week.
