Aluminum in a spectacular interplay of supply and demand

Globally, the aluminum market is characterized by a dramatic interplay of supply and demand. This is primarily due to an enormous global demand for energy and electricity.

"Lightweight" aluminum, in particular, is currently in high demand. Consider, for example, its use in the automotive industry, where iron and steel are increasingly being replaced by aluminum. We’re seeing this particularly in electric cars right now, because the lower weight can help offset the much heavier battery packs to some extent.

The supply of aluminum is under significant pressure. Its production—essentially the conversion of bauxite into aluminum—requires an enormous amount of electricity. Not entirely unexpectedly, China is the largest producer of this metal. However, they are sometimes unable to meet the energy demand there, which occasionally even leads to blackouts.

For that reason, measures have been taken to limit energy consumption. Like other sectors, the aluminum industry must reduce its production. As a result,China hasbegun importing semi-finished products on a massive scale.

Electricity prices have skyrocketed in the EUas well. Many smelters are choosing to cut back on production to save costs. As a result, the price of aluminum has also risen to record highs here.

All in all, the market is extremely tight. Anyone with large inventories is currently king in the aluminum world.