Aluminum
Market, Supplier, Risk and
Competitive Intelligence

Industry Outlook

Aluminum Market Forecast and Global Outlook

• Asia will continue to lead the global aluminum industry, in terms of growth prospects until 2021. 
• Curtailment measures by suppliers and lower demand from the automotive sector will negatively impact the market; however, demand is expected to be driven by construction and electrical engineering sectors.
• Key driving forces of the aluminium market include downstream demand, rising construction projects, and demand for lightweight and energy-efficient materials in various end-use sectors
• Highest production regions: China, Russia, Canada, India, and the UAE. 
• Highest consumption regions: China, the US, Germany, Japan, and the UAE
• Highest aluminium market maturity regions: Asia Pacific (APAC), and the Americas.
• Even though aluminum has been commonplace in the automobile industry over the past several years, the metal is finding immense use in the manufacturing of electric vehicles (EV), given its lightweight and high-tensile strength attributes. 
• Considering the rising carbon footprint, governments across continents are imposing strict norms to promote energy efficiency in automobiles.
• Automotive heavyweights such as Mercedes and BMW are increasingly replacing stainless with aluminum as it accents similar features.

Global Aluminium Market Overview - Production & Consumption

• The aluminum market is expected to see a supply surplus scenario from 2020, on the account of a fall in demand from the downstream sectors. 

• The global production of primary aluminum was expected to hit 10-11% in 2020. China, the largest producer of aluminum, is likely to witness a downtrend in production due to the closure of plants by established players such as Xinfa group and Hongqiao Group. 

• The production is expected to grow at a CAGR of 2–3% over the forecast period, aided by increased production in China, Iran, and Indonesia. In China, companies including East Hope, Hangzhou Jinjiang Group, Baoshan Iron and Steel, Inner Mongolia Mengtai Group, are planning to increase production capacity. SALCO aluminum smelter in Iran was expected to start by 2020. Moreover, Indonesia’s Asahan Aluminium (Inalum) plans to ramp up its production.

Global Aluminum Market - Drivers and Restraints

Drivers 

Rising Usage in Pharmaceutical Industry

Aluminum blister foils are broadly used in pharma packaging for packing tablets and capsules. This blister packaging contains a molded plastic with cavities for each tablet or capsule, a push-through blister, and a push-through closure made from aluminum foils, which is called lidding foil or blister film.

The strip pack is developed by placing the tablet or capsule in a blister or blister of a plastic-molded sheet, and then thermally welding the plastic film to the aluminum foil which is printed and layered with a binder and a protective agent. As such, aluminum foil for blister packaging is also the key aluminium foil in pharma packaging.

Flexible Packaging 

• Aluminum foil packaging usually comes in the form of pouches, containers, foil wraps, and blisters. Among these, the demand for containers is high in the marketplace as it suits the flexible packaging criteria. 
• In Saudi Arabia or the UAE, the demand for aluminium foils is more in the packaging of food & beverage products. As such, the private stakeholders are investing in these regions in the flexible packaging format, according to the aluminum industry outlook 2020 and 2021.

Restraints

Stringent Environmental Norms

• The implementation of strict environmental policies is negatively impacting the aluminum price forecast.
• Market players in the global aluminum market are tied up in bureaucratic knots to rethink and develop smelting facilities as per the new emission standards, thus adding to the operational costs.
• Moreover, consumers are increasingly toward products that have been packaged with eco-friendly layering.

Global Market Overview - Regional Breakup

• Following regions witnessed a downtrend in production Y-o-Y: China (1.9%), Latin America (7.3%), Europe (2.2%), whereas North America witnessed a slight production increase by 1% and production in Asia (excl. China) witnessed a production increase, owing to increasing supply from the Middle East economies.
• The global aluminum installed capacity has declined, as China geared up for the new air pollution prevention and control action plan. The production in Latin America decreased, mainly on the account of production curtailment by Albras Alumínio Brasileiro. 
• Production of aluminum foils and films in North America has risen, primarily driven by the production rebound of prominent US companies including Century Aluminum, Magnitude 7 Metals & Alcoa (Warrick smelter). 
• Primary aluminum consumption in China decreased by 1.53%, amounting to 36.07 MMT due to reduced demand from the automotive sector as the government ended subsidies for cheap and low-quality hybrids and electric cars. Countries such as Japan, Korea, and India followed the same trend.
• While import tariff by the European Union (EU) on unwrought aluminum has minimum to no effect on demand, it has led to the rise in imports. Currently, imports account for around 74% of primary aluminum demand. Demand in North America witnessed a slight increase of 1% in H1 2019, majorly driven by the automotive industry. However, reports reveal that demand is anticipated to drop on a yearly basis with respect to 2018.
• The booming construction sector in Asia Pacific (APAC) is projected to drive the aluminium market in the region. Large-scale aluminum production capacities have triggered product availability at lower costs. Moreover, rising recycling rates are likely to create worthwhile opportunities for market players and offer a boost to aluminum sales.

Global Market Overview - End-use

• The construction sector will remain the major driver of the upward aluminum market trends owing to surging expenditure on infrastructure and residential development projects in emerging economies as well as increasing shift towards green construction technology, where aluminum fabrications, aluminum castings, aluminum extrusions, and aluminum profiles are key components of construction materials.
• The transport industry, a key consumer of diecast aluminum, aluminum forgings and aluminum flat-rolled products, witnessed a slowdown in the initial phase of 2020 due to COVID-19 restrictions. Consequently, global production of automobiles fell by approximately 3-5%.
• Aluminum is finding immense use in electronic products such as laptops, smartphones, and tablets given its lightweight and high-strength attributes.  
• Demand from the packaging industry is also expected to increase as industries look for alternatives for plastic packaging.

Price Trend and Forecast

• Aluminum price trading at London Metal Exchange (LME) has remained under selling pressure and dropped by 6.3% in July 2018 and averaged to settle at $2099/MT.
• Moreover, escalating trade tensions between the US and China as the former’s administration pledged to raise the proposed tariffs on $200 billion worth of Chinese goods to 25% from an initial 10%, have further put pressure on aluminum price trading
• China reported a strong rate of production in the first half of 2018 as total aluminum production rose 13.6 million tonnes, up 1.4% from previous year levels, according to the National Bureau of Statistics (NBS). Moreover, International Aluminium Institute (IAI) reported that global output, excluding China, averaged 75,800 tonnes in May 2020, which is still higher compared to the 74,100-tonne average last year
• Major price drivers include fluctuation, LME aluminum stock, global supply & demand, global economy, Chinese supply & demand, and energy prices.
• Aluminum price trading at LME has consolidated sideways and stood almost unchanged at $1849/MT in April 2019.
• Aluminum prices were affected by sentiments in global equity markets.

Why You Should Buy This Aluminum Market Report

• The aluminum market analysis report highlights the regional aluminum industry outlook 2021,  aluminium market size, aluminum market share, aluminum market forecast, aluminium price forecast 2021, and aluminum market trends for the Americas, Europe, Australia, and APAC. 
• Overview of the global non-ferrous metals, minerals and mining aluminum market, major cost components involved in aluminum production, key mergers and acquisitions (M&A) strategies.
• It lists out the factors affecting the aluminium industry and key drivers and constraints such as end-user demand, environmental concerns, and dollar exchange rate.
• Porter’s five forces analysis of the global aluminum industry.
• Key supplier profiles and SWOT analysis of players such as UC Rusal, Chalco, and Alcoa.