It will be more expensive. This is the message that hits consumers on all sides. The end customer will pay more, but the producers of all kinds of goods must also struggle with the increases. The imminent changes that we will witness in one of the industries will certainly be widely commented on.
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When we wrote in our pages some time ago about the problems with the availability of magnesium on global markets, it was rumored that the automotive industry, which needed this raw material for the production of many components, would suffer the most. The forecasts are that if the Chinese do not resume mining and production on a large scale, and let us remind you that they are responsible for 85 percent of the world volume, then the market may simply run out of magnesium before the end of the year.
The price went up
However, as it turned out, the world currently has a problem not only with magnesium, but also with aluminum, the prices of which in global markets have skyrocketed. Of course, this is not something that happened suddenly and we should be very much surprised, but the rising trend has recently reached a level that has raised serious concerns and poses a specific threat.
All because of the increasing costs of aluminum extraction, which mean that companies processing it have to raise prices to make their work profitable. And so, if you look back and move back in time by only a dozen months, it will turn out that in such a short interval, aluminum prices soared up almost twice. If in the first half of 2020, you had to pay exactly 1,536 dollars per ton of this raw material on the London metal exchange, the price jumped to almost two thousand at the beginning of this year. Time has shown that it was not over, and after just a quarter, we were talking about a price of 2,224 dollars per tonne.
If someone thought that it simply could not be more expensive, a glance at the latest quotes from the London Stock Exchange is enough to see that it is still not the end. Currently (as of November 4, 2021), a ton of aluminum costs over 2,700 dollars, and it is no wonder that more and more industries for which it is a very important raw material herald further increases.
Producers of aluminum profiles and systems, but also the industrial automation industry, which uses this raw material very widely, do not have any outputs.
Beer and virus
However, there is also one rather unusual sector where the increases will affect casual consumers the most. It is, of course, about the brewing industry. Apart from the rising prices of barley, which are the aftermath of the drought in the United States, and which supply as much as 20 percent of this raw material to the market, it is the problem with aluminum that keeps the giants of this market awake at night. It is, of course, about the production of cans, for which aluminum is of course an indispensable raw material.
Beer producers, in turn, are more and more willing to use cans at the expense of bottles, and as it turned out, the coronavirus pandemic turned out to be key in this area, which quite significantly influenced the habits of consumers who during subsequent closings and the need to stay at home could not use bars and preferred to bet for canned beer, the purchase of which is often cheaper and more handy. These are much easier to pack in four or six packs, which in addition are lighter and easier to handle after consumption.
- The Covid-19 pandemic has significantly affected consumer habits and has brought about significant changes. Cans are environmentally friendly media - said Buddy Stemple, president of The Aluminum Associacion.
So, today, the can is very fashionable and more and more popular. It is also influenced by environmental considerations and recycling costs. With the growing demand and ever higher prices, we are on a straight path to pass the final cost to the end recipient, i.e. the customer who is looking for his favorite beer in store cans. Prices will certainly go up, and if you add the fact that the rulers in Poland decided that alcohol is generally too cheap and charged it with higher excise duties, the increases may be significantly higher than anyone predicted a dozen or so months ago.
