Aluminium price hits 13-year high as energy surge pressures supply
Aluminium jumped to the highest since 2008 as a deepening power crisis squeezes supplies of the energy-intensive metal that’s used in everything from beer cans to iPhones.
Industry insiders like to joke that aluminum is basically “solid electricity.” Each ton of metal takes about 14 megawatt hours of power to produce, enough to run an average U.K. home for more than three years. If the 65 million ton-a-year aluminum industry was a country, it would rank as the fifth-largest power consumer in the world.That meant aluminum was one of the first targets in China’s efforts to curb industrial energy usage. Even beyond the current power crisis, Beijing has placed a hard cap on future capacity that promises to end years of over-expansion and raises the prospect of deep global deficits. Energy costs surging across Asia and Europe mean there’s a risk of more supply cuts, and some investors are betting that prices have much further to run.
Aluminum rose as much as 2.8% to $3,049 a ton on the London Metal Exchange Monday, the highest since July 2008, leading broad gains among base metals. Copper rose to the highest since mid-September, while zinc and lead pared early losses as oil and other commodities, including metals like iron ore, keep climbing.
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