Energy Crisis really affects all industries, including aluminum

Kaiser Aluminum Corp. said it will add surcharges to all new orders of fabricated aluminum products beginning July 1 to offset rising costs for natural gas, electricity and diesel fuel.

The company said commodity prices for natural gas and diesel fuel was about 60 percent higher in May compared with the average 2007 price. The company said the charges will be based on indexes provided by the U.S. Department of Energy and will be updated monthly. The company believed that using a surcharge is the most transparent method to recover these costs.

Constricted supplies and robust world demand could push aluminum prices up to $3,600-$4,000 per metric ton by the end of the year and $ 4,250-$4,500/ton by the end of 2009, industry analysts said.

As China leads a surge in global demand for aluminum, the industry is attempting to keep up in the face of rising energy prices, increasingly prevalent speculation in commodities market, and uncertainly over approaches to curb global climate change. These factors, market analysts said, are buttressing the price of a commodity already in high demand given its relatively low price compared to copper -- a substitute for aluminum.

Source: Dow Jones Newswires and AP