The alumina market is experiencing unprecedented volatility as prices surged to record highs on the Shanghai Futures Exchange (ShFE) in October 2024, which had a serious impact on the mining industry in Shanghai. This dramatic price action was driven by a combination of supply disruptions and speculative frenzy. Alumina, the primary raw material for aluminum production, has seen its price skyrocket in recent months. The LME cash price has surged to $633.35 per metric ton, pushing the alumina-aluminum ratio to nearly 25%, a significant increase from the 15% ratio observed at the beginning of the year. Supply disruptions, particularly stemming from export challenges in Guinea, a major bauxite supplier to China, have fueled this price surge. However, the explosive nature of the price action on the ShFE suggests a strong speculative component. Record trading volumes and open interest on the ShFE alumina contract indicate significant investor activity. To curb excessive speculation, the exchange has adjusted trading limits and margins, imposing a premium on speculative positions. This measure aims to mitigate the risks associated with volatile price swings and ensure market stability. The emergence of the ShFE alumina contract has significantly altered the market dynamics, specifically for the mining industry in Shanghai. While the LME and CME Group offer alumina contracts, their liquidity pales in comparison to the vibrant and volatile Shanghai market. This increased liquidity has amplified price movements and introduced a new dimension of volatility to the global alumina market. The current price spike echoes a similar episode in January, further highlighting the potential for significant price fluctuations in this increasingly dynamic market. As the global aluminum industry navigates these turbulent times, the role of the ShFE alumina contract will continue to be a crucial factor in shaping market dynamics and influencing the cost of aluminum production worldwide.