Rising power prices are causing a shakeout in the aluminum sector, forcing the closure of some plants and tightening global supplies.
The price of aluminum on the London Metal Exchange has increased by 24% over the past six months to more than $3,100 a metric ton, approaching a decade high. Tensions between the U.S. and Russia over the deployment of 100,000 troops on the border with Ukraine have also buttressed prices. Russia is one of the world’s biggest aluminum producers and traders fear disruptions to its exports if conflict breaks out.
But energy costs have risen even faster, forcing the closure of plants in China and Europe that haven’t been able to cut costs deep enough to remain profitable. In Europe, natural-gas prices are almost five times as high as they were a year ago because of cold weather and a drop in the flow of gas from Russia. Energy can account for up to half…
