Producing aluminum in Brazil has become so expensive this year, as electricity prices surge to record highs, that Alcoa has idled its Pocos de Caldas smelter and now sells the facility’s power instead of metal, Bloomberg News reported.
The worst drought in decades has drained reservoirs used to run hydroelectric generators that supply power to extract aluminum, boosting costs already inflated by more spending on labor and transportation. Cities may be forced to ration water, and last week the government cut taxes on imported aluminum to help ease shortages as demand grows for beverage cans.
The Indian aluminum cash price fell 1.9 percent on Thursday, August 14 to INR 123.95 ($2.03) per kilogram, making it the day’s biggest mover. The cash price of primary aluminum changed direction with a 0.7 percent drop. After two days of improving prices, the metal finished at $2,026 per metric ton on the LME. Weakening prices followed two days of improvement as the aluminum 3-month price dropped 0.4 percent on the LME to $2,043 per metric ton.
Chinese aluminum prices were flat for the day. The price of Chinese aluminum scrap continues hovering around CNY 12,250 ($1,990) per metric ton for the fifth day in a row. The price of Chinese aluminum billet saw little movement at CNY 13,590 ($2,208) per metric ton. The price of Chinese aluminum bar held steady at CNY 14,200 ($2,307) per metric ton. The cash price of Chinese aluminum was unchanged at CNY 13,960 ($2,268) per metric ton.