CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
US English

Aluminium advance as European smelters cut output

By Fitri Wulandari

04:06, 23 December 2021

A large aluminium foundry with casting cells
A large aluminium foundry with casting cells – Photo: Shutterstock

Aluminium briefly broke through $2,800 on concerns that rising energy prices, particularly in Europe, could lead to more smelters curbing production.

The benchmark aluminium contract on the London Metal Exchange closed 1.43% higher at $2,793.25 per tonne on Wednesday, after hitting $2,809.5, for the first time since end of October. The most-traded aluminium contract on the Shanghai Futures Exchange closed 1.89% higher at CNY20,245 per tonne ($3,177.78), according to Shanghai Metal Market (SMM).

“Surging European energy prices are taking a toll on the manufacturing side of the business, as producers are unable to run the factories facing such high costs. Aluminium, being one of the more energy-intensive materials, has felt this more evidently,” a commodities broker at Sucden Financial in a note on Wednesday.

Production curb

Aluminium Dunkerque Industries France, the largest aluminium smelter in Europe, has curbed output in the past two weeks due to surging power prices, Bloomberg reported on Wednesday.

Romanian aluminium producer, Alro Slatina, has started a programme of total closure of the activity due to high energy prices, Romania Insider reported. Alro Saltina is one of the largest vertically integrated aluminium producers in Europe and one of the largest energy consumers in Romania, according to the media. 

Dutch Title Transfer Facility (TTF), the European benchmark gas futures price, closed at an all-time high of €180.68 per megawatt-hour on Wednesday as energy crisis worsened on Tuesday, according to Danish lender, Saxo Bank.

Natural Gas

2.97 Price
-0.100% 1D Chg, %
Long position overnight fee -0.4543%
Short position overnight fee 0.4324%
Overnight fee time 21:00 (UTC)
Spread 0.0050


22.19 Price
-1.930% 1D Chg, %
Long position overnight fee -0.0201%
Short position overnight fee 0.0119%
Overnight fee time 21:00 (UTC)
Spread 0.020


1,848.86 Price
-0.870% 1D Chg, %
Long position overnight fee -0.0196%
Short position overnight fee 0.0114%
Overnight fee time 21:00 (UTC)
Spread 0.30

Oil - Crude

90.04 Price
-1.230% 1D Chg, %
Long position overnight fee 0.0661%
Short position overnight fee -0.0881%
Overnight fee time 21:00 (UTC)
Spread 0.030

A combination of natural gas shortages, nuclear power outages, weakening wind power output, and cold weather boosted the price of gas futures.

More output cut

“The market is worried that Montenegro, Germany and other countries may cut the production of aluminium at the end of the year due to the shortage of energy supply in Europe and the sharp rise in electricity prices,” SMM said on Wednesday.

Aluminium production capacity in Western Europe stands at about five million tonnes, accounting for 6% of the global total, according to SMM.

According to data from the International Aluminium Institute global primary aluminium dropped to 5.497 million tonnes in November, from 5.508 million tonnes in November last year.

Read more: Aluminium is at a 13-year high as soaring costs drive up prices

Related topics

Rate this article

The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
Capital Com is an execution-only service provider. The material provided on this website is for information purposes only and should not be understood as an investment advice. Any opinion that may be provided on this page does not constitute a recommendation by Capital Com or its agents. We do not make any representations or warranty on the accuracy or completeness of the information that is provided on this page. If you rely on the information on this page then you do so entirely on your own risk.

Still looking for a broker you can trust?

Join the 555.000+ traders worldwide that chose to trade with

1. Create & verify your account 2. Make your first deposit 3. You’re all set. Start trading