Aluminium is a metal widely used in construction, packaging, transport and food packaging. It is also used as an electrical conductor due to its good conductivity. The demand for aluminium is therefore high and it’s one of the most recycled materials on the planet.
So, the aluminium price per kg depends on many factors including:
The Market Demand for Aluminium
The market demand for aluminium determines how many companies will be willing to buy it from suppliers and resell it in their own stores or online shops. If there are more buyers than sellers, then this drives up the price as more people want to buy it from someone else. However, if there are fewer buyers compared with sellers then this will bring down prices as people try to sell their products at lower prices so that they can make sales. This can lead to a situation where there are only a few buyers left who may not want to pay high prices for their goods and services anymore.
Transportation Costs
The first factor that determines the price of aluminium is the transportation costs. Aluminium is a lightweight material and can be transported easily. It is therefore not surprising that it is shipped all over the world.
The cost of transportation depends on the distance between the supplier and consumer, as well as the mode of transport used in transporting the goods to their destination. If you are located far away from your supplier and require a lot of shipping services, expect to pay more for your aluminium products.
Cost of Production
The cost of production also plays a significant role in determining how much you pay for your aluminum products. The higher the cost of production, the higher will be your price tag on these products. This is because most manufacturers use raw materials like coal and bauxite in producing aluminum products. These raw materials are not cheap at all, which explains why some companies sell their products at a higher price than others do.
Currency exchange rates
The value of the US dollar has a huge impact on the world price of aluminium. As one of the top producers and exporters of aluminium, the US dollar impacts on both global supply and demand for the metal. The strength or weakness of the dollar affects how much money is available for investment, as well as how much can be made from selling commodities such as aluminium.
The US Dollar Value
The value of the US dollar has a huge impact on the world price of aluminium. As one of the top producers and exporters of aluminium, the US dollar impacts on both global supply and demand for the metal. The strength or weakness of the dollar affects how much money is available for investment, as well as how much can be made from selling commodities such as aluminium.
Conclusion
One of the main factors driving aluminium prices upwards, then, is its status as a premium, luxury product. That said, it’s worth noting that there are also numerous other factors which can result in high price volatility. These additional factors prove that high price volatility is now a hallmark of the aluminium market and not just an anomaly. As such, any who invest in the market need to consider these additional factors when attempting to determine future price movements.
