Aluminum Hits $3,418/Ton as U.S. Smelters Operate at Minimal Capacity
Aluminum prices surged to $3,418 per ton, the highest since April 2022, after Aluminium Bahrain halted shipments, driving a 9% year-to-date gain. U.S. smelters, including Century Aluminum, now operate just four commercial primary facilities and produce under 1% of global supply while facing steep power costs.
1. Global Supply Disruption Spurs Price Rally
Aluminum prices climbed to $3,418 per ton, the highest level since April 2022, after Aluminium Bahrain declared force majeure on shipments through the Strait of Hormuz, tightening global availability and lifting prices by more than 9% this year.
2. U.S. Smelting Capacity Remains Limited
Domestic primary smelting has contracted to six facilities, four of which are commercially operated by Alcoa and Century Aluminum, collectively producing less than 1% of global output and covering only around 30% of U.S. demand at full capacity.
3. Energy Costs Challenge Domestic Producers
Producing aluminum requires about 14 megawatt-hours of electricity per ton, and Century Aluminum competes with large tech data centers that bid up power prices, making it difficult to secure the low-cost, long-term contracts needed for profitable expansion.
4. Impact on Century Aluminum Prospects
With aluminum prices elevated, Century Aluminum stands to improve margins on existing output, but persistent capacity constraints and high energy costs limit potential volume growth unless new power agreements can be secured.