According to Citigroup, the recent surge in coal and electricity prices might raise the production cost of European aluminum smelters by up to US$2,900/tons, higher than the current aluminum price.
In addition to the soaring demand and production restriction in China, the sharp increase in energy cost also brought great pressure to the global aluminum supply as the aluminum smelting industry is an energy-intensive industry. As a result, aluminum prices, which have hiked to a 13-year high, were expected to continue to rise further.
Moreover, due to the possible worse energy crisis in Europe in the winter, aluminum smelters might also face risks of production suspension. Due to the tight supply in China caused by the seasonal power restrictions, aluminum prices might soar and the gap between aluminum supply and demand might be widened worldwide if power outages happen in other regions.
Citigroup: European energy crisis may result in production suspension at aluminum smelters
24 Sep 2021 14:39 reported by Joy Liu
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