Aluminium demand sinks as prices rocket
Prices are up 67% on last year's figures
Aluminium prices have shot up by 67% on last year’s figures and are expected to rise above US $2400 per tonne within the next three months.
The London Metal Exchange (LME) listed the price of primary aluminium in April 2009 as $1420 per tonne and new data shows prices have climbed to $2380 this month.
And, on Monday, oil costs rose above $85 per barrel, which could rocket the price of aluminium even further.
“The LME rate will cross the $2400 per tonne level this year,” predicted Khalfan Al Suwaidi, general manager of Emirates Extrusion Factory, a subsidiary of M’Sharie, a private equity arm of Dubai Investments.
“If the Iranian nuclear issue escalates, this may be the biggest factor that affects the oil prices, which is directly correlated to the price of aluminium. Also, if the US and Europe economy picks up, then aluminium prices will definitely go up.”
Demand for aluminium in the GCC has also dipped this year, according to manufacturers.
“Before the financial crises there were enough projects to cover the supply. The situation has changed and there aren’t enough projects to meet the supply of aluminium,” says Reem Emirates Aluminium brand manager Timour Asfour.
That argument was seconded by Suwaidi: “The existing capacity in the GCC is 500K tonnes of aluminium, while the demand may not exceed 200K tonnes. And, locally [in the UAE] the supply is 150K tonnes and around 45K tonnes is in demand.”