Any Chance of New Aluminum Supply Just Got Hit By Power Crunch
- Smelting costs are surging as electricity and coal prices jump
- Idled plants set to stay offline as costs offset price rally
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Surging energy costs are adding to pressure on global aluminum supply at a time when demand for the metal used in everything from cars to beer cans has already driven prices to a 13-year high.
Just weeks ago, it looked like aluminum’s blistering rally might spark a worldwide rush to reopen mothballed smelters. However, the industry is massively energy intensive. The spike in global electricity and coal prices will make restarts increasingly difficult and some producers may also soon be struggling to run their existing smelters profitably if the energy crunch worsens, particularly those not locked into long-term power contracts.