- The price of aluminum on the London Metal Exchange exceeded $3,300 per ton this week and is approaching the historic highs it reached before the 2008 financial crisis due to investor fears of lower supply.
On Thursday, the contract for delivery in three months reached $3,333 per ton during the session, just $50 below the $3,380 recorded in July 2008, which is its all-time high, according to the Bloomberg database.
In 2021, the price of the metal rebounded by almost 40%, and so far this year it has risen another 15%.
Carsten Menke, head of research at Swiss bank Julius Baer (SIX:BAER), believes that the main reason is fear of a supply shortage, which can be explained by factors ranging from China's capacity cuts due to environmental issues to possible sanctions against Russia over the conflict in Ukraine.
In addition, high electricity prices in Europe, which have risen steadily since the second half of 2021 and set several historic records, have led some producers of this metal to announce production cuts.
Europe is a major destination for Russian aluminum exports, and any decision on sanctions could contribute to a reduction in supply, although Menke points out that this risk is already reflected in the market in view of the high prices.
In his opinion, sanctions "could wreak havoc" on the global aluminum market and would affect not only this metal, but also raw materials necessary for its production, such as bauxite or alumina, in factories.
The Swiss bank expert adds that a decline in aluminum supply could lead to further disruptions in supply chains.
As for China, Menke indicates that the situation remains unchanged from last year, when investors were already expressing concern about the reduction in production from the Asian giant due to environmental issues.
In August 2020, following the lockdowns at the start of the pandemic, aluminum fell below €1,500 per ton, from where it rebounded to around $2,400.
However, since last summer, the price has risen again, coinciding with the worst moment of bottlenecks and supply shortages, and in mid-October it exceeded $3,200 per ton.
News from es.investing.com
Graph from eleconomista.es
