Aluminium Is Concentrated Like Cobalt, Just for a Different Reason

Aluminium is the world’s second most-used metal, roughly 72 million tonnes a year, and its production economics are dominated by a single line item that barely matters for most other materials on this site: electricity.

Putting a number on the concentration

Running the index on aluminium’s real 2024 smelting shares (China roughly 59%, then India, Russia, Canada, the UAE, Bahrain, Australia, Norway, the United States, and Iceland each in the low single digits) gives an HHI of roughly 3,801, comfortably “highly concentrated” and in the same range as cobalt’s mine-supply concentration. The mechanism behind the two numbers is completely different: cobalt’s concentration is geological, aluminium’s is an electricity-market outcome, covered on this material’s supply chain page, which matters for what kind of intervention could actually change it.

Why the price tracks energy more than ore

Unlike copper or cobalt, where ore cost and processing capacity dominate the cost structure, a large share of a smelter’s operating cost is its electricity bill, which means aluminium’s price is unusually sensitive to regional power prices and, by extension, to energy policy and fuel markets. A spike in electricity prices in a major smelting region can curtail aluminium production directly, independent of any mining disruption, a real and repeatedly observed pattern in the industry’s history.

Sources: smelting shares reference this project’s own published production data (International Aluminium Institute, USGS); HHI is computed directly from that data; the 2,500 HHI threshold is the US Department of Justice/FTC Horizontal Merger Guidelines convention.