Aluminium market deficit to take the metal price to a 30-year high in 2022, predicts Eurasian Resources Group CEO

According to latest estimates, aluminium has strong potential in 2022 to outperform other non-ferrous metals on the London Metal Exchange, exceeding the important milestone of $3000/t at the start of the year. The news came after diversified mining major Eurasian Resources Group CEO Benedikt Sobotka said in a statement on January 27.

According to Sobotka, the aluminium market will remain in a deficit in 2022 for the second consecutive year, as indicated by inventories at the lowest level since the global financial crisis – a period of extreme stress in global financial markets and banking systems between mid-2007 and early 2009.

In 2021, the global aluminium price stood 13-year high, increasing by more than 40 per cent year-on-year.

Sobotka predicts China’s aluminium supply growth to be constrained due to the country’s strict restrictions on energy consumption by energy-intensive industries, resulting in slow ramp-up of idled smelting capacity.

“Moreover, the world’s accelerated decarbonisation efforts and soaring energy prices limit capacity additions outside China. In fact, we could see further smelting capacity cuts in Europe,” Sobotka said, noting that about 700,000 tonnes, or about 14%, of European smelting capacity, excluding that of Russia, had already been cut.

Sobotka noted the aluminium demand was supported by China’s infrastructure investments. Going ahead, ramp-up in electric vehicles production and focus on recyclable aluminium packaging will ensure higher aluminium demand than the supply, according to Sobotka.

 “As a result, we could see the highest aluminium prices in over 30 years,” he concluded.