AI Data Center Power Demand Spikes Aluminum Prices as Smelters Face Energy Crisis
Aluminum prices surge as AI data centers compete for electricity, impacting major smelters like Rio Tinto. Explore how the AI boom is reshaping global commodity markets.
The phrase "canned electricity" has never felt more literal. Aluminum prices are surging as the artificial intelligence boom triggers a massive grab for power, leaving industrial smelters struggling to keep the lights on.
The Collision of AI Data Center Power Demand and Metal Production
As of January 7, 2026, industry analysts report a significant spike in aluminum futures. According to Reuters, the primary driver isn't just increased demand for the metal itself, but the skyrocketing cost of electricity needed to produce it. AI data centers are guzzling energy at such a rate that power grids are being strained to their limits.
Operations at major firms like Rio Tinto and South32 have been stymied. In many regions, electricity prices have soared so high that aluminum smelting—an incredibly energy-intensive process—has become economically unviable. Some smelters have already begun scaling back production to avoid catastrophic energy bills.
Strategic Shifts in Global Supply Chains
Companies are scrambling for alternatives. Nippon Light Metal is reportedly turning to India for recycled aluminum, while Mitsubishi Materials is betting on copper recycling in Europe to hedge against supply shocks. This trend highlights a broader commodities rally, with gold, silver, and copper also hitting record highs amid dollar concerns and industrial scarcity.
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