Aluminum prices are holding at 10-year highs thanks to growing demand for the metal amid the general recovery of the global economy from the effects of the COVID-19 pandemic. On Monday, the cost of aluminum is $ 2541.75 per ton. As a result of trading on Friday, it amounted to $ 2,615 per ton, thus increasing by 31% since the beginning of this year. Alcoa Corp., a major aluminum producer. and Norsk Hydro ASA have added 77% and 45% respectively this year. The current year could bypass 2010, becoming "the year of the most significant growth in aluminum demand in history," said Colin Hamilton, analyst at BMO Capital Markets.
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Aluminum is widely used as a packaging material, as well as in the construction and aerospace sectors, which are growing with the global economic recovery. In addition, the metal is used by manufacturers of electric vehicles, including in the housings of some of the premium models. "We are seeing a general recovery in economic activity, and aluminum is winning in almost every direction under these conditions," says Eoyn Dinsmore, an analyst at CRU consultancy. According to the BMO forecast, the global demand for aluminum this year will increase by 8.5% to 68.2 million tons.
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At the same time, the supply of metal may be less than expected, writes the Financial Times. For example, aluminum enterprises in the Chinese province of Yunnan have recently been forced to cut production. A drought in the region has disrupted hydroelectric power plants, and the provincial government has asked aluminum smelters to cut electricity use. According to experts' forecasts, Yunnan province was supposed to provide about 50% of the growth in global aluminum production between 2020 and 2023, and any cuts will have global implications, Dinsmore said. "This region is very important for the aluminum market - this is where supply increases," he says.