LAluminum has silver glints more than ever. The price of light metal has soared on the stock market since the beginning of the year. It even exceeded the rating of 3,260 dollars (regarding 2,860 euros) per ton, Wednesday, February 9, on the London Metal Exchange (LME). That is an increase of 16% compared to its share price on 1is January 2022. Highest since 2008 and a flick away from its all-time high. Premium price for aluminum…
The “flambeurs” bring the non-ferrous metal to incandescence. They brandish firebrands to light the aluminum. And they don’t lack ammunition. Thus, the decision taken by the Chinese government on Sunday February 6 to confine the city of Baise added embers to the speculative fire. The challenge: to extinguish a hotbed of Covid-19 cases so as not to overshadow the Winter Olympics which are taking place on its territory. Or Baise, located in Guangxi, is referred to as “Aluminium Capital of South China”.
Extreme tensions
Any risk of supply disruption sends shivers down the spine of the markets. Especially since China is the world’s largest producer of aluminum. As for the second, Russia, it blows hot and cold. Everyone hopes that its president, Vladimir Putin, will not light the fuse in the Ukrainian powder keg. But the extreme tensions around the country have caused an unprecedented energy crisis. The price of gas has soared, dragging the entire energy bill down in its inflationary wake. The outbreak of a conflict might further fan the speculative flame.
In this context of stratospheric costs, manufacturers have chosen to put certain very energy-intensive foundries in Europe on hold or, at the very least, to reduce their production rate. This slowdown also affected Chinese sites forced, them, under the directive of the government of Xi Jinping, to reduce their polluting emissions to host the white games under a blue sky.
This metal with multiple industrial uses, from coffee capsules to cans to airplane cabins, is benefiting from the post-Covid recovery.
A slowdown which was already noticeable in 2021 and which contributed to the rise in the price of aluminum over the months. In addition, at the beginning of September 2021, the military coup in Guinea had caused a blow of heat on the markets. This small West African country indeed holds almost a quarter of the world’s bauxite reserves from which alumina is extracted, then transformed into aluminium. But eventually economic life resumed, with the military junta having a vested interest in continued mining activity.
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