Economics of aluminum

Aluminum market: consumption, price

aluminum prices

On 2015 year world aluminum industry still clearly looks unhealthy. Aluminum prices on the London Metal Exchange, it seems, hit bottom. Fluctuations prices still going down, the premium amount is reduced, proposal still exceeds demand.

cena-spot-alyuminiyaFigure 1 - Dynamics of prices for aluminum
on the London Metal Exchange for the last year

Much to the displeasure of the world's largest producers of primary aluminum, China has no intention to reduce its share of production, at least, at the beginning of November 2015 of the year.

Most aluminum markets around the world crowded cheap Chinese aluminum products, including, aluminum semi-finished products, such as, profiles and sheets, which comes in a very short period of time. All this greatly harms the domestic markets in the various countries, including the US.

Aluminum consumption increases

Ranked Among all these troubles there is one factor, which gives hope to the aluminum industry: the demand for aluminum is still growing and the business of aluminum end consumers is developing successfully. However, the rate of this growth in consumption, Unfortunately, still lags behind the speed of growth and production, Consequently, aluminum supply on the world market.

Therefore, large producers of primary aluminum are increasingly focusing their attention on their own verticals aluminum consumption, because they feel, that is how they can achieve maximum profit in the current situation in the aluminum market.

Vertical aluminum consumption of Alcoa

Alcoa, one of the world's aluminum giants, recently announced in response to the current climate in the aluminum market that it has decided to split into two independent companies - the Upstream Company and the purely innovative technology company in the aluminum industry (the Value-Add Company). This new company other than normal production of aluminum rolled products will focus on the development of new engineering solutions for the use of aluminum in all industries. Particular attention will be given to engineering, Transport and Construction. Moreover, This company is going to be permanent and versatile supplier of aluminum materials and products for the fast-growing aerospace industry.

Alcoa will be actively involved in meeting the growing demand for aluminum from the automotive industry. This will contribute to the recent adoption by the industry of new breakthrough technologies, such as the Micromill technology for the production of aluminum automotive sheet. Moreover, this innovative company will focus its efforts on meeting the needs of high aluminum wheel centers for trucks and growing aluminum building systems markets queries.

reported, that Alcoa invests 60 million US dollars in the construction of a new research center to develop technologies 3d-printing aluminum parts and assemblies for the aerospace and automotive industries.

Norsk Hydro: more innovation in aluminum

Following Alcoa, Norsk Hydro - another global aluminum giant - Europe's third largest aluminum producer - is also considering a similar split into two parts: an aluminum company and an innovative aluminum finished product company.. experts believe, This separation - it's just a matter of time.

Basic aluminum consumption sectors

Looking at the picture 2, it becomes clear, that more than half of the aluminum consumption market is occupied by transport engineering (27.35 %) and construction (25, 32 %). They are followed by the electrical industry (13.17 %%) and production of packaging materials and materials (8.10 %). All other consumers of aluminum remains only 5,6 % world consumption.

sectory-potrebleniya-alyuminiyaFigure 2 - World aluminum consumption by sector in 2014 year

Aluminum in transport

Demand for aluminum in the transport engineering industry is clearly on the rise. Aluminum has largely replaced the ponderous and continues to replace steel in the construction of cars and trucks. And not only in cars: aluminum, which in the old called volatile metals, It is increasingly used in bicycles, buses, trains, river and sea vessels, and even spaceships.

difficult task, facing automakers, It is to reduce emissions of harmful gases car. Standards for these emissions are constantly being tightened in many countries. This forces us to make cars, that consume as little fuel. The easiest way to do this - to make cars lighter and lighter. This race car makers for the most easy car pushes them on the path of innovation with the use of aluminum sheet, aluminum profiles and aluminum castings of all large volumes.

Aluminum in construction

The construction of the appetite for aluminum is increasing mainly due to the construction boom in developing countries, to catch up in building the infrastructure of their cities. It nourishes the demand for aluminum in the form of aluminum profiles aluminum and other construction products. Such aluminum products, as aluminum hinged mills and structural glazing system, aluminum roofing and aluminum cladding of buildings is becoming commonplace in these countries.

Aluminum in the electrical industry

Monopoly copper in the electrical industry almost comes to an end. This is due to the increasing use of aluminum in a large number of electrical products. Aluminum is widely used in high-voltage power lines, Tire electrical substations, Television aerials and satellite "dishes". Increased use of aluminum in electrical demand will push on aluminum semifinished, such as aluminum wire, aluminum rods and aluminum profiles.

aluminum packaging

Use of an aluminum packaging material grows on eyes. chemical inertness, endless processability, light weight, ready for molding and application images and inscriptions - all this makes the aluminum packaging material for the number one of the leading companies for the production of goods of mass demand. These companies are always looking for unexpected ideas, to diversify their products and stand out in the competition among other companies such. Aluminum packaging is ideally suited for this. Aluminum packaging is increasingly establishing itself as the most environmentally friendly packaging, which also contributes to consumption of aluminum packaging.

Packaging industry also uses large amounts of recycled aluminum, which is recovered from scrap aluminum. Aluminum cans beverage, including , beer cans, and aluminum cans from aerosol, for example, processed in very large quantities and with great energy savings.

Aluminum in other sectors of the economy

In other sectors of the economy also increases the consumption of aluminum. So, Industry for the production of mobile communication consumes considerable amount of aluminum. All the leading brands - Samsung, Sony, Lenovo, HTC, Xiaome and iPhone - have their own aluminum smartphones.

All of these aluminum products, which reaches its final consumer, and many others like them are pushing the global aluminum demand for the manufacture of high-tech consumer goods and, thereby, contribute to the development of the aluminum industry.