In recent years, the deepening energy crisis has become a global issue. This crisis has squeezed the supply of many different metals. On the back of this crisis, Aluminium and Copper have hit their decade-high prices all around the world.
Aluminium is one of the metals whose production method is energy-intensive. Therefore, Aluminium has a high emission per dollar intensity. But its lightweight property makes it an ideal usage choice.
Factors Causing a Spike in Aluminium Prices
To put it in a rough estimate, producing every tonne of Aluminium takes around 14-megawatt-hours of power. To let you know how big this is, with this much electricity, you can run an average household for more than 3 years.
The prices of energy have been increasing in recent years as well. Since Aluminium production depends on a huge amount of energy consumption, its prices are spiking as well.
2. Reduced Production
In China, about 4% of the country’s entire carbon emissions are released from Aluminium production. For curbing these emission levels, Beijing is putting a hard cap on copper’s upcoming production scale. This act will cause a major loss in Aluminium supply. Therefore, spiking its prices.
3. Worldwide Demand
With the demand and rise of “nature-friendly” energy sources, worldwide demand for Aluminium is expected to grow even more. Aluminium is a very light and conductive metal. Therefore, more companies are using it to make cars and electric wires, such as Paraflex.
In 2021, Copper spiked up to a record-breaking decade-high price point. As known in the industry, Doctor Copper has a way of indicating a growth of an economy with its rise.
Factors Causing a Spike in Copper Prices
1. Unreliable Supply
Chile is currently the supplier of 1/4th of Copper worldwide. But with increasing threats of a strike by the port workers and mining associations there, things are starting to get unreliable. This protest is threatened against their President for an issue related to the pension funds.
2. Insufficient Inventory
The inventory capacity of copper in many main warehouses, such as London, is running down at a noticeable rate. As of April 26, 2021, the inventory of copper has fallen about 10 per cent in 10 days, subsequently.
3. Unexpected Demand
China uses nearly half of the globally produced copper every year. The demand for copper is continuously increasing in China and US as well. Companies such as Paraflex make their industry-leading electric wires using copper.
The spike in both Aluminium and Copper prices is affecting many industries based around them. Experts have suggested that this spike will stay for this year but things will get better in the upcoming year. Paraflex hopes for this betterment and ensures its user that it will stay true to its goal of providing the best quality.