The future of aluminum
Consumption of aluminum today and in the future
This section describes the consumer of aluminum and discusses how the future consumption of aluminum will develop.
Construction and transportation sectors are the largest consumers of aluminum
Today the primary consumers of aluminum are the construction and transportation sectors. Together these sectors make up 50 % of the global aluminum consumption. The remaining 50 % is divided between a number of sectors such as packaging, machinery, electrical devices and more.
Aluminum has a high degree of diversification compared to i.e. copper. This is because aluminum is used in many different sectors (figure 1).
Source: CRU Strategies
Growth of the Aluminum Industry today
During the last years the growth of the aluminum industry has been based on a growing market in Asia and especially China. Within the last ten years Chinese consumption of aluminum has quadrupled. The reasons for this among others are investments in infrastructure and growing living standards which result in a higher per capita consumption of aluminum. In countries like China and India with large populations and a low per capita consumption of aluminum the opportunities for growth for the aluminum industry are good. With time urbanization and better living conditions for a growing part of the population will mean a larger consumption of aluminum. This is where the growth of the aluminum industry lies today.
Even though the Asian consumption of aluminum provides opportunities for growth today this growth is not able to last indefinitely. Eventually even the consumption in China and India will have matured and the growth will be slower than today. China has already publicly declared that they wish to lower infrastructure investments and rely more on growing consumer spending.
At the same time there is an ongoing competition for the consumers both from other industries such as plastic, but also other metals as copper are competing with aluminum. Lastly secondary aluminum (recycled aluminum) also competes with primary aluminum.
Growth of the Aluminum Industry in the future
So how will the aluminum industry secure growth in the future?
Aluminum has potential for development. This is where the future growth is to be found. Historically the aluminum industry has not put a lot of focus on research and development and finding opportunities for growth in alternative sectors. This tendency is changing today. The properties of aluminum that are lightweight, recyclability and durability are in focus when developing new products.
The new markets for aluminum are found within aviation, solar cells, electronics, cars and new types of material for construction. To enter these markets however, it will require the industry to develop products and promote aluminum within new markets. Aluminum has already succeeded in entering part of the copper market since copper is higher priced and is heavier than aluminum. Therefore manufacturers can save costs and weight in their production if they are able to exchange copper materials for aluminum materials.
Aluminum consumption today is dependent on better living conditions and traditional industries as transportation and construction. The aluminum industry is working to be able to utilize its future growth potential within new products and markets. In this way the industry wants to secure a sustainable development in the future.