Aluminum prices have risen to their highest level in a decade due to an increase in demand. The Wall Street Journal (WSJ) reported on the 30th (local time) that aluminum futures on the London Metal Exchange (LME) have tripled this year.
Aluminum prices collapsed in May last year due to lower demand as industries, including aerospace, were affected by the Covid-19 pandemic, but are now up 80% since then.
Asian countries are in high demand for aluminum, which is used in beverage cans, aircraft, and construction.
There are currently enough aluminum stocks to meet global demand, but they are concentrated in Asia, making it difficult for importers in the U.S. and Europe to obtain them. According to analysis, it has increased by over 80%.
According to Alcoa CEO Ron Harvey, North America is suffering from an aluminum shortage at present.
Colin Hamilton of BMO Capital Markets reports that China has become the world’s largest net importer of aluminum since 2009, and inventories in Rotterdam, the Netherlands, have been relocated to Malaysia, near the Chinese market.
Aluminum production is down in China as the country imposes energy restrictions, while Russia, one of the largest aluminum exporters, has raised prices as it imposes taxation on metal exports.
Last year, ING Group strategists said investors, banks, and trading companies bought aluminum and stored it in logistics facilities, causing a shortage.
BMO’s Hamilton expects China to continue importing aluminum for the foreseeable future as it invests in moving energy-intensive production facilities to other Asian countries to reduce carbon emissions.
CEO of Monster Beverage Company, Hilton Schlossberg, says he has never seen prices rise as much as they have in the past year, and he has signed additional contracts with suppliers from Asia, Latin America, and the United States.