Record-Level Aluminum Price Spike in 2021
The raw cost of materials of aluminum has reached a 10-year all-time high in pricing. And according to three data sources, it is predicted that the price of aluminum will continue to increase significantly over the next several years.
Market Forecast for Aluminum Prices
|Organization Name||Y/E Prediction 2021 (per metric ton)||Long-Term Prediction (per metric ton)|
|The World Bank||$2,000||$2,400 (by 2035)|
|The International Monetary Fund (IMF)||$2,083||$2,276 (by 2026)|
|Innovation and Science Australia (ISA)||$2,134||$2,160 (by 2022)|
Importance of Aluminum and Impact on the Industry
Aluminum is one of the top metals of choice for manufacturing industry professionals around the globe. The reason for this is due in part to its astonishing properties: corrosion resistance, high strength, and low-density. Aluminum is also non-toxic, which makes it ideal and health-compliant for any application. Whether it’s transportation, automotive, aerospace, construction, communications, or food packaging, the uses and applications of aluminum are immense.
In electronics, it is significant that aluminum is an excellent heat and electricity conductor and pound-for-pound twice as conductive as copper. Aluminum is the first choice for major power transmission lines. For many applications that require heat to be drained away rapidly, such as in computer motherboards and LED lights, aluminum also provides excellent heat sink capabilities. Pure aluminum is used principally by the electronics industry for capacitor foil, hard disc drives, and conductor tracks on silicon chips.
Rising aluminum costs are a result of supply and demand drivers. As demand for aluminum have been high from both consumers and producers, prices for the raw material have been pushed to a record 10-year high on August 31st, 2021.
Supplier Announcements Regarding Aluminum
- Trulite – “The shortage of aluminum in the United States has resulted in unprecedented increases in prices and may last up to two years.”
- Oldcastle BuildingEnvelope (OBE) – “Strong demand for aluminum-intensive products and the ongoing global supply chain challenges will continue to put pressure on the overall cost of aluminum.”
- Aluminum Solutions – “The cost of aluminum has risen more than 50% since January and experts believe it will continue to go up. Unfortunately, aluminum is not the only thing increasing in price. We have seen a dramatic increase in the cost for fuel, wood, and wages These increases make it necessary to implement an 8% price increase effective September 6 for all of our aluminum systems and their respective components.”
How to deal with fluctuating prices of materials
SiliconExpert’s data and expertise can help gain an in-depth look into the supplier responses and notifications regarding raw materials which impact products and their lifecycle statuses. Our software can help find alternatives and show available inventory from authorized distributors.
Our supply chain module can help customers identify risks in their supply chain. This service combines factors of geo-location and known risks in a proprietary formula to determine the overall supply chain risk score by the supplier and by part number. this service gives insight as it relates to this event as well as data that can help teams proactively mitigate impacts of future events through our supply chain module.
We track the prices of the strategic and precious minerals every day and detect any fluctuations, so customers can link this knowledge with our parts database which shows if parts contain the affected material.