The largest aluminum industry conference in North America warns that the shortage of global aluminum supply will be difficult to ease in the short term.

There are signs that the supply crunch that has disrupted commodity markets and pushed aluminium prices to a 13-year high this week is unlikely to ease anytime soon, at North America's largest aluminium conference, which ended on Friday. the consensus among producers, consumers, traders and transporters.

Aluminium prices have risen 48 per cent this year due to soaring demand, shipping bottlenecks and production restrictions in Asia, raising concerns about inflation and consumer goods producers are facing a double whammy of raw material shortages and sharply rising costs.

At the Harbor Aluminium Summit in Chicago on September 8-10, many participants said supply shortages would continue to haunt the industry for much of next year, with some even predicting that it could take up to five years to solve the supply problem.

At present, the global supply chain, supported by container shipping, is trying to keep up with the strong demand for goods and overcome the impact of labor shortage caused by the novel coronavirus epidemic. The shortage of workers and truck drivers in aluminum plants has exacerbated the problems in the industry.

"for us, the situation is very chaotic and unfortunately, when we look forward to 2022, we don't think it will go away any time soon," Mike Keown, chief executive of Commonwealth Rolled Products, said at the summit. "for us, the difficult situation is just beginning, which will keep us vigilant."

Commonwealth mainly produces aluminum value-added products and sells them to the automotive industry. Due to the shortage of semiconductors, the automobile industry itself is also facing production difficulties.

Several people who attended the Harbor aluminum summit also said that labor shortage is the biggest problem they currently face, and they do not know when the situation will ease.

"consumers actually order far more than they need," Adam Jackson, head of metals trading at Aegis Hedging, said in an interview. They may not expect to receive all the goods, but if they are oversubscribed, they may be able to get close to the quantity they expect. Of course, if prices fall and you hold additional unhedged inventory, then this is very risky. "

The surge in aluminium prices comes as producers and consumers are negotiating annual supply contracts. Buyers are trying to delay reaching a deal as much as possible because freight is too high these days. In addition, according to Jorge Vazquez, managing director of Harbor Intelligence, they are still watching and waiting to see whether Russia, the world's second-largest aluminium producer, will retain expensive export taxes until next year.

All this could herald a further rise in prices. The average aluminium price in 2022 is expected to be about $2570 a tonne, which will be about 9 per cent higher than the average so far this year, according to Harbor Intelligence. Harbor also expects the so-called Midwestern premium (Midwest premium) in the US to soar to an all-time high of 40 cents a pound in the fourth quarter, up 185 per cent from the end of 2020.

"chaos may still be a good adjective right now," said Buddy Stemple, chief executive of Constellium SE, who works in rolled products. "I have never experienced a period like this and face so many challenges at the same time."