Aluminium prices on the rise

Tension between China and Australia will ultimately affect consumers of beer and soft drinks.

The confinement and measures taken due to the pandemic have brought serious consequences for the industries and this has not been different for the aluminum sector. The shortage of cans has affected beer and soft drink manufacturers in the United States, as you might expect.

This has been stated by U.S. manufacturers Monster Beverage Corp and Keurig Dr Pepper, who have had to turn to can manufacturers in South America and Asia, which, of course, has incurred an increase in transportation and logistics prices, not to mention the sustained increase in cans. Consumer demand, on the other hand, increased with confinement, so they had to respond to it.

The price increase is due to two important factors. The first of them has to do with the tension that is growing between two big countries such as China and Australia. A tension that was initially exarcebbated by Australia’s request for investigations into the origin of Covid-19 in China and its evolution into a pandemic.

Why does this situation affect the aluminium sector and especially prices? The answer lies in the fact that China is the main buyer of aluminium and Australia is an important supplier of materials such as bauxite and alumina. This situation has caused aluminum prices to rise by almost 25% this year, in addition to an expected crackdown on polluting smelters in China, which will result in a limitation in the supply of this material to the Asian country.

But, on the other hand, and as the also American Molson Coors Beverage has stated, the shortage of 12-ounce cans for hard seltzers has forced, in the case of this company, to suspend some low-speed lines. In other words, a crisis is unfolding that seems to go on and on.

The prices of transport and logistics is one of the most serious factors because in no way companies are covered against this, but, however covered they are, the rise in metal prices will affect manufacturers and, therefore, consumers. There is talk, that a year, the price of the metal has been 80% in the United States and 70% in Europe.