China has great importance to the aluminum industry

There is a lot of talk about China within the aluminum industry. In the last ten years China has quadrupled its consumption of aluminum and today by far has the highest consumption in the world.

The figures below show how large the Chinese share of global consumption is today and what it is expected to be in 2025.

Source: Wood Mackenzie/ Brook Hunt

Today China is the largest aluminum consumer and the largest producer as well as being the country with the largest growth within both consumption and production.

There are several factors that contribute to the Chinese growth in consumption:

• General growth and urbanization in China results in a higher per capita consumption
• Goals and strategies of the Chinese Government has resulted in investments in infrastructure and housing which also consume large amounts of aluminum
• Finally, the continued strong position of China as a producer of industrial goods for export, result in large investments in the aluminum industry.

In China the aluminum industry is highly influenced by society and the Chinese Government. The recent objectives of the Chinese Government are to invest less in infrastructure, which is expected to result in lower growth in aluminum consumption. Furthermore it the Government expects that the aluminum industry will move to regions with lower population density in order to minimize competition for energy between industry and cities.

China is still of great interest to the aluminum industry since it represents half of the global market and market continues to show large growth rates. In the event that China is not able to keep up its self-sufficiency in aluminum it may become an important market for global aluminum supply and thereby impact the global aluminum market by turning into a more stable buyer from the global aluminum industry.