According to analysis, metal is going to outpace the demand, bringing more pressure for auto manufacturing industries.
However, the cost of energy is rising faster than metal supply, which motivates many plant closures in China and Europe. In Europe, the natural gas prices have climbed to almost 5 times higher than a year ago, due to cold weather and a drop in gas supply from Russia. Energy can cost half of making aluminum, as a result, market participants nicknamed aluminum as the commodity electricity.
The electricity price in Spain reached a record high at the end of 2021. And, after Alcoa expressed exorbitant energy prices, the company is going to close its San Ciprián aluminum plant in Spain, the plant used to have an annual capacity of 228,000 tons.
According to FactSet, LME aluminum reserves in approved warehouses have dropped to the lowest level since 2007.
Aluminum prices not able to follow up with energy costs, which motivates closure waves
3 Feb 2022 16:00 reported by Hao Hung
- A
- A
- A