Aluminium prices continue to rise
In June we reported on the rise in aluminium prices and the fact that these were expected to rise throughout 2021. Figures released today show that, as predicted, prices have continued to rise due to supply and demand pressures which still dominate the market.
At the beginning of July, aluminum was $2,481 per Tonne. As of the 3rd September, these prices had risen again to $2,696 per Tonne. However, the steep incline in prices was masked a little as prices actually fell back during the second half of May from $2,549 to $2,305 per Tonne. Prices have therefore risen from $2,305 to $2,696 per Tonne during this 14-week period, a growth of almost 17%. If this level of increase was to continue, we could see an annual price increase of over 60% by this time next year–or $4,000 a Tonne; a figure that many believe is unlikely.
These increases in prices have been attributed to a reduction in the production of aluminum, primarily in China, and the growth in demand for aluminum components as the aviation, car, and other major global industries start to recover from the pandemic and look towards increasing manufacturing capacity again.
According to the Dutch multinational financial services company ING, global demand is expected to remain strong, leading to a widening supply gap which is likely to keep prices high.
The supply shortage is projected to increase to over 1million Tonnes in 2023 and aluminum prices, according to many market experts including Fitch Solutions, will remain high for years to come as the demand will be supported by the accelerating shift towards a green economy and the need for aluminum components in manufacturing.