There are many drivers of the price of aluminium, including demand, supply and investor sentiment. However, in this Metals Watch, we are going to focus on the supply-side. In particular, we are going to assess the outlook for the cost of some of the main inputs to the refining process – alumina, energy and petroleum coke (petcoke). There is no global cost of production Aluminium refiners will obviously want the price of aluminium to cover the cost of inputs. However, there is no one global cost of production, given wide variations in the prices of inputs such as energy and labour. Aluminium refining is highly energy intensive. (See Chart 1.) But there are huge differences in the cost of energy faced by producers.
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