The world market price of aluminum has decreased rapidly for the past weeks and months, from USD 3,300 (EUR 2,610) per ton in July to USD 1,642 (EUR 1,299) on Wednesday last week, according to information from the London Metal Exchange (LME).
Aluminum is one of Iceland’s most important export products.
The revenue of Icelandic energy companies, primarily the National Power Company Landsvirkjun, Reykjavík Energy (OR) and Sudurnes Heating Utility (HS), fluctuates with the price of aluminum due to sales agreements on electricity to aluminum smelters, Morgunbladid reports.
The current depreciation trend of the price of aluminum has never been as rapid in the history of trading with the metal and the trend is similar to the price of other raw goods such as oil and steel.
The value of stocks in many production companies of raw goods, including aluminum companies, is falling along with the world market price. The value of stocks in Alcoa has dropped from USD 35 (EUR 27) in July to the current value of USD 10 (EUR 8)—a 70 percent decrease.
Alcoa has therefore undertaken global rationalization measures which include postponing projects.
Alcoa in Iceland, which operates an aluminum smelter in Reydarfjördur in east Iceland, is not planning any such measures and the company is still planning to construct another smelter at Bakki near Húsavík in northeast Iceland.
Click here to read more about that project.