It’s used in drink cans, refrigerators, air cons, cooking utensils… Construction and manufacturing industries cannot do without it.
And now, it’s been identified as a critical metal because of the role it plays in the green energies megatrend!

Because of its corrosion resistance, it’s essential in solar installations for frames, wires, and support structures and for offshore wind farms…tower platforms, transformer stations, and turbines. And it’s a vital component in the electric vehicle revolution.

For these reasons, the US and EU have classified the metal as critical.
I’m talking about…

Critical metal: Aluminium!

Aluminium is already widely used in power grid installations as an alternative to copper. This is not a new phenomenon.
Around 80 years ago, during the early days of World War 2, engineers scrambled to find an alternative to copper. An alternative metal with similar conductive properties.

After passing initial trials, aluminium was incorporated into power utilities and other electrical wiring, including homes and factories. And although almost 40% less efficient, what makes it better than copper is its ability to conduct electricity long distances.

According to the International Aluminium Institute, demand is expected to grow by 33.3 million tonnes by 2030. Rising from 86.2 million tonnes to 119.5 million tonnes.

Around 37% of this growth is expected to stem from China, through manufacturing, construction, and the country’s ambitious power grid upgrade to accommodate electrification.

But like copper, the supply of aluminium is under threat…

You see, aluminium production is energy intensive. About 14,000 kWh of electricity is required to produce just 1 tonne of refined metal.

That means, rising energy costs can impact supply. And that’s exactly what we witnessed across Europe in 2022.
As war broke out in Ukraine and Putin restricted gas supplies, energy prices spiked. In response, aluminium smelters slowed operations and curtailed output.

Given that war continues to rage on and energy prices remain high, sufficient supply of aluminium from Europe could be hard to come by.

The recent ban on new Russian aluminium supply by the London Metal Exchange (LME) and the Chicago Mercantile Exchange (CME) may also worsen the supply situation.

After all, Russia provides around 6% of global aluminium. The last time Russian aluminium was banned in 2018, aluminium prices soared to new highs.

We could see a similar situation play out that could unlock profits from aluminium producers in 2024.

That’s where this South African small cap producer has an important to role to play. You can find the complete analysis of this JSE listed stock in Red Hot Penny Shares out now.
Here’s to unleashing real value
PS. We expect this aluminium producer’s share price to double in the short term! Details in the latest issue of Red Hot Penny Shares.

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