Aluminium encyclopaedia

Price of aluminium

After Sainte-Claire Deville introduced the first "silver from clay" onto the market in 1855, its price was higher than that of silver for a long time because of its rarity. Accordingly one used it for pieces of jewellery and coins. It was only after aluminium production skyrocketed from 1886 onwards after the introduction of fused-salt electrolysis that the price fell so low (from 15 to five German marks a kilogram in 1891 alone) that a large number of aluminium applications became economical. After that, the aluminium companies set the price of aluminium. For decades they remained stable except for temporary fluctuations, mostly resulting from war (for example during the Russo-Japanese War in 1904/5).

This has changed since the 1970s. New producers (particularly Brazil, Venezuela, Australia, South Africa and the Arab countries) forced their way into the market with prices for primary aluminium that were below the cost price of the industrialised countries. At the same time, the leading bauxite countries raised their prices. The introduction of aluminium contracts on the London Metal Exchange in 1978 coupled with radical structural changes in the aluminium industry turned primary aluminium into a normal commodity so that subsequently financial factors contributed to the market participants" pricing. The listing of aluminium (and other non-ferrous metals) on the LME offers producers and users opportunities for medium-term price protection.