The global demand for aluminum

Aluminum is a product that can be used again and again. It is therefore particularly important that used products containing aluminum are collected so that the metal can be reused in new products. The environmental benefit of recycling is considerable, in part because recycled aluminum (secondary aluminum) only requires approximately 1/20 of the energy required to produce aluminum from aluminum oxide (called primary aluminum).

The amount of recycled aluminum available, however, is nowhere near enough to satisfy market demand.

During the period 2000-2009 the consumption of primary aluminum saw an average annual increase of 3.8%. Industry analysts expect (as of March 2010) that this figure will rise to 4.3% per year during the period 2010-2020.

Direct link to the global economy

Aluminum is, just like steel, copper and other basis metals, a highly cyclical product. When the global economy was booming in 2006-2008, the demand for aluminum was very high and investors speculated in continued price increases. During the global recession in 2008-2009, the demand for aluminum suddenly fell drastically. Since production could not be brought down at a similar rate, the market quickly became saturated with metal, stocks grew explosively and the price of aluminum fell markedly as a result.

This led to major parts of the industry making heavy losses and a number of plants had to close either temporarily or permanently.

The gradual recovery of the global economy during the first half of 2010 has once again resulted in an increase in demand. The price of aluminum has thus increased to a level at which the industry can once more make a profit.

Industry analysts expect that the production of primary aluminum in 2010 will exceed the previous peak in 2007, after which there will be a steady growth in demand. There will thus once again be a need to build new aluminum plants within the next few years.

Growth on new markets

Highly developed countries such as the USA and the industrialized nations in Western Europe have a high consumption of aluminum, approx. 25-30 kg per inhabitant per year. Industry forecasts do not expect the consumption of primary aluminum in industrialized countries to exceed current levels. They can thus be said to have reached a "saturation point", whilst the least developed countries do not yet have the basis for such a high demand for aluminum.

Many countries that have embarked on intensive industrialization - such as China and India - have a rapidly increasing consumption of aluminum, and will have an increasing impact on developments in terms of demand in the future.