Icelandic smelters helped by high aluminium prices
The recent coup in Guinea is part of the reason for the price increase, as it has caused a restriction in the supply of bauxite, from which aluminium is made.
Pétur Blöndal, director of Samál, says the global price rise is also due to production rates in China reaching close to maximum capacity. Around half of the world's aluminium supply is manufactured in China, using coal.
Despite this, China is now importing more aluminium than it exports and this is having a good effect on producers in Iceland, whose smelters have been running at a loss in recent years due to very low market prices for the metal.
"This changes a lot. The operation has been difficult in recent years and this is therefore a good stimulation and there are bright prospects on the aluminium markets," Pétur says.
Do you expect this will mean Icelandic smelters return to profit? "Yes, we can strongly expect that, yes," Pétur predicts.
Last year, there was discussion of closing the smelter at Straumsvík and Rio Tinto representatives called on Landsvirkjun to lower electricity prices to avoid the closure. Bjarni Már Gylfason, the company's press officer, says the smelter is in a much stronger position today.
"What changed in the contract with Landsvirkjun is that a connection to aluminium prices was established. That means that the electric price is high now and that is good for Landsvirkjun and for Iceland. But it also allows our company to deal with the fluctuations in aluminium prices that we can expect to continue in the coming years. But the situation right now is very good and it's satisfying to see aluminium prices as high as they are," Bjarni Már says.