Whenever there is a question of pricing, the aluminium industry has pointed towards a single influx inducer — electricity. If you’ve ever toured a smelter or skimmed an investor deck, you’ll hear the same refrain, “power is king, and aluminium is electricity in solid form”. But, as Maros Durka, Area Sales Manager at Grupa Kety, states, that is only half the truth. Yes, electrolysis eats megawatts like popcorn, but if power were the only story, Europe’s aluminium would be cheap and cheerful by now. After all, Europe boasts the cleanest smelters on earth, with over 78 per cent of output powered by renewables. And yet, paradoxically, European primary aluminium is still the world’s priciest.
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So, what gives? Why are Europe’s ‘green’ tonnes also the most expensive ones?
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The great power illusion
Let’s start with the cost stack. Smelting is brutally energy-intensive. Depending on whose spreadsheet you read, electricity plus heat makes up 35-45 per cent of the bill, raw materials like alumina another 30-35 per cent, with the rest split between labour, maintenance, logistics and a sprinkling of compliance costs. If you zoom out, that looks straightforward: electricity dominates.
But, it’s not the source of the electrons that sets the price; it’s the market.
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