Soaring aluminum drives up cost of everything from beer to foil
For consumers and economists hoping commodities inflation will soon subside, the aluminum market delivered some discouraging news on Monday.
The world’s second-largest brewer, Heineken, said the rising costs of freight and the metal used in beer cans will have a “material effect” on profit next year. Reynolds Consumer Products, the maker of the iconic Reynolds Wrap, said it’s facing costs of about $400-million this year driven in large part by aluminum and resin.
The announcements come on the heels of a more than 30% gain in benchmark aluminum prices so far this year, with the metal on Monday approaching a decade high. The warnings are the latest in a host of cautionary signals from companies that underscore the potentially far-reaching impact of the surge in commodities from corn to steel.
Further dimming prospects for a break from elevated aluminum prices is that years-long supply gluts are beginning to fade, with demand for low-carbon energy sources boosting demand for the lightweight material and top producer China cracking down on polluting industries such as metals producers. Goldman Sachs Group Inc. is forecasting record prices above $3 000/t by late next year.
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