As energy shortage posed a challenge to Europe together with tension with Russia in the last half year of 2022, which cause the price to skyrocket, it force a discontinued production across Europe, leading to a sence that the price of electrolytic aluminum—over 1 million tons—has been ramping up for a long period.
Fortunately, due to low-price hydroelectricity, the global output of aluminum is likely to keep a steady growth as most of the aluminum refineries use hydroelectricity to produce aluminum alloys, especially in Ireland, Norway, Swedish, and Britain. By energy mix and manufacturing contract, aluminum refineries that have announced a reduction in output will expand their production scale again based on the commercial dimension when utilizing hydroelectricity as a way for aluminum alloy manufacturing. In the USA, there are two factories that have announced a reduction of more than 244,000 tons by the end of June which will cause a huge shortage of over 900, 000 tons across Europe and the USA.
By price, the aluminum price of LME(London Metal Exchange) seems to keep steady, though international energy price is rising sharply. But talking about geopolitical risk, the global supply chain, especially aluminum alloy will play a crucial role in raising the purchase price of aluminum and reducing the storage of LME which leads to a shrinking supply chain and the ban on the export of bauxite for supporting their downstream industries. And simultaneously, That is what Indonesia is doing right now—the prohibition of exporting bauxite, copper, and tin from 2022 to 2024 against heaping pressure on domestic supply.