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Aluminum curbs the enthusiasm of the restart: shortage and skyrocketing prices

The market is getting hot: the industry restarts strongly after the pandemic, but is slowed down by the shortage of raw materials.

Aluminum represents an excellent example of the complex economic situation. In fact, the light metal is in short supply throughout Europe, while its prices reach record levels.

A strategic point of view

Alu-met, one of the main European independent remelters, represents a privileged observation point to analyze the current situation of the aluminum market.

Alu-met is an Austrian company, specialized in the remelting of scrap and located in a strategic position, at the center of the European aluminum downstream. It manufactures billets, aimed at the production of extrusions.

The macroscopic data

Gerhard Anger, managing director of Alu-met, clearly analyzes the causes and consequences of the increase in demand for aluminum and the difficulty of finding metal on the market. Factors that determine a worrying extension of delivery terms, which further weighs on the price of the metal.

The pandemic factor

And it is precisely the high value of the premiums on billets and the difficulty in procuring quality metal that create panic among the operators in the sector.

All this is obviously motivated by the dynamics generated by the pandemic. In fact, companies had significantly reduced their stocks and found themselves unprepared for the price rebounds caused by the record prices reached by raw materials.

Aggravating factors

The stop to imports of Chinese semi-finished products has further aggravated the situation, depriving the European sector of over 500,000 tons of semi-finished products, including extrusions and rolled products.

At the same time, the state incentives of European countries for the recovery of construction and solar energy have contributed to generating tension in prices.

Last but not least, the restart of the automotive sector, a crucial sector for the consumption of aluminum, is forcing this dynamic. In particular due to the growing demand for electric cars, characterized by a greater use of light metal compared to combustion vehicles.

The situation is therefore as unexpected as it is delicate, as will its resolution.

Source: A&L Alluminio e Leghe

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