The Global Aluminum Market was valued at USD 161.50 Billion in 2022 and is projected to reach USD 258.49 Billion by 2030, registering a CAGR of 6.01% for the forecast period 2023-2030.
Market Definition
Aluminum is a metallic element that has a silver-white appearance and is naturally flexible and non-magnetic. It is represented by the symbol Al and is the most abundant metal in the Earth's crust. The metal is in high demand in various industries such as packaging, electrical, and aerospace. The market for aluminum is growing due to the increased demand for packaged goods and the use of aluminum instead of stainless steel by automakers. The demand for electric cars and OEM producers is also contributing to the expansion of the market. China's construction, transportation, packaging, and electrical sectors are the major consumers of aluminum. The government is working hard to improve accessibility to aluminum for industrialists, which is expected to have a significant impact on the growth of the global aluminum industry. However, there are still some challenges that need to be addressed to ensure the growth of the industry. Aluminum is an excellent choice for this application due to its high conductivity, which allows it to transmit electricity with minimal loss. Unlike some other metals, Aluminum is non-toxic and can be recycled without losing its properties. This makes it a desirable choice for green technologies such as solar panels and wind turbines. The increased interest in Aluminum as an electrical conductor is driven by several factors, including the need for more energy-efficient Products, the rising demand for renewable energy technologies, and the metal's eco-friendliness.
Market Size:
- 2022: USD 161.50 Billion
- 2030: USD 258.49 Billion
- CAGR (2023-2030): 6.01%
Aluminum Market Dynamics
Drivers Propelling the Demand for Aluminum include:
The growing popularity of secondary aluminum to aid market growth:
The demand for aluminum is constantly increasing due to its ability to be recycled into various Products such as car bodies and tractor-trailers. When aluminum cans are recycled, they can be turned into new cans of the same metal without any reduction in quality. This means that they can be recycled indefinitely, saving natural resources and energy while reducing pressure on landfill sites. In fact, almost 95% of the energy used to make cans from bauxite ore is saved when new cans are made from recycled metal. Additionally, making recycled metal requires only 5% of the energy required to produce new aluminum metal. Even scraps left during the production process can be melted down and reused, which means that around 75% of all aluminum metal produced is still in use today. Furthermore, the increasing demand for sustainably sourced Products is also expected to drive metal recycling operations and boost market growth during the forecast period for the aluminum market. It is possible to produce secondary aluminum to the same high standards as primary aluminum. The use of secondary aluminum in a wide variety of applications does not compromise the quality or performance of the end users. Using secondary aluminum can help to reduce the dependence on primary aluminum Product which is often concentrated in a few countries. This can improve supply chain security and reduce the risk of disruptions. Governments worldwide are increasingly supporting the use of secondary aluminum through various policies and regulations, such as tax incentives, subsidies, and mandates for minimum levels of recycled content in Products, due to this factor driving the growth of the Aluminum market.
For instance, in June 2023, according to Tomra, Alustar chose TOMRA's new generation X-TRACT for high-purity aluminum sorting in its Product facility in Türkiye to produce secondary aluminum billet from aluminum scrap.
Growing demand for Aluminum from Food & Packaging and Pharmaceutical Industries:
The demand for aluminum is increasing due to its non-toxic properties, ability to preserve food for longer periods, and ability to inhibit the growth of microorganisms. This demand is primarily driven by the food & packaging and pharmaceutical industries. Packaging is a crucial factor for businesses in the manufacturing sector to ensure customer satisfaction. The global packaging market is expanding rapidly due to the growth of manufacturing facilities, food processing facilities, and industrial Products. The e-retail industry and the food and beverage sector are also driving the demand for packaging. The demand for aluminum is also increasing due to the growing penetration of retail pharmacies in developing regions and the focus of pharmaceutical manufacturers on brand enhancement and Product differentiation. Additionally, various governments' focus on strengthening healthcare facilities and insurance coverage is further expanding the demand for pharmaceuticals, which, in turn, is boosting the market growth. Aluminum is a highly effective barrier material that plays a crucial role in safeguarding pharmaceuticals from moisture, oxygen, and other contaminants. This is essential to prolong the shelf life of pharmaceuticals and ensure their effectiveness. Moreover, aluminum is a lightweight material, which makes it ideal for pharmaceutical packaging, particularly for blister packs and vials. This feature makes it easier to transport and dispense pharmaceuticals, ensuring that they reach their intended destination safely and efficiently, overall, this factor drives the growth of the Aluminum market.
For instance, in July 2022, Novelis, a leading sustainable aluminum solutions provider and the world leader in aluminum rolling and recycling, today announced it is expanding its ever-cycle portfolio to the cosmetic packaging market. Ever Cycle Cosmetics is certified to contain 100% recycled aluminum and can achieve customers' anodized quality requirements. The new alloy offers packaging customers in the beauty, skincare, and wellness space an infinitely recyclable solution compared to plastic alternatives.
Recent Developments
- February 2022
RUSAL a leading global aluminum producer, has developed an optimized 5xxx series aluminum alloy for further anodizing. Production has now started at the Bratsk Aluminum Smelter (BrAZ). RUSAL's Technical Directorate conducted a general assessment of the alloy and organized its mass production.
- July 2022
Rio Tinto is investing US$188 million (CA$240 million) to increase the production capacity for low-carbon, high-value aluminum billets at its Alma smelter in Lac-Saint-Jean, Quebec by 202,000 metric tons. The existing casting center at Rio Tinto's Alma plant will be expanded to accommodate new state-of-the-art equipment, including a casting pit and furnaces, allowing a larger portion of the aluminum produced to be converted to higher-value billets.
Restraint in the Aluminum Market
Strict environmental regulations may hinder the growth of the Aluminum market:
The implementation of stricter environmental regulations by governments and associations across the globe is expected to limit market growth. This is due to the expanding environmental-related problems and increasing public expectations for government action to reduce pollution levels. Several countries have had to adopt new regulations to address rising environmental issues and meet the expectations of their citizens. However, these regulations have increased the cost of goods due to smelting operations required to meet higher emission requirements. Additionally, consumers have become increasingly aware and concerned about environmental health in the past decade. Aluminum Product is a process that requires a lot of energy and generates a significant amount of pollution. As environmental regulations become more stringent, aluminum producers are required to invest in new technologies and processes to reduce their emissions. However, these investments can increase Product costs, making aluminum less competitive with other materials. Aluminum is produced from bauxite, which is a naturally occurring ore that is mined from the ground. Environmental regulations can restrict or ban bauxite mining in certain areas, which can limit the supply of aluminum ore and drive-up prices. Countries with strict environmental regulations may impose trade restrictions on aluminum imports from countries with less stringent environmental standards. This can make it more difficult for aluminum producers in countries with less strict regulations to compete in the global market, thus factors may hinder the growth of aluminum market.
Challenges in the Aluminum Market
Limited availability of organic Products
Switching to renewable energy sources for aluminum Product can be significantly more expensive compared to using fossil fuels. This is because renewable energy sources are often intermittent and require significant infrastructure investments. Additionally, the cost of renewable energy can fluctuate due to factors such as weather conditions and political policies. The current electricity grid is not well-equipped to handle the large-scale integration of renewable energy sources. This can lead to challenges in transporting and storing renewable energy, which can, in turn, increase the cost of Production. Current electrolysis technologies are not yet able to achieve the same level of efficiency with renewable energy sources as they can with fossil fuels. This can lead to higher production costs and emissions. Moreover, renewable energy sources are not always available in all regions where aluminum Production takes place. This limitation can hinder smelters from switching to renewable energy, and it may require them to invest in carbon capture and storage (CCS) technologies. The regulatory landscape surrounding decarbonization is still evolving, which can make it difficult for companies to plan for the future and invest in new technologies. Additionally, there is a lack of clear global standards for carbon pricing, which can make it challenging to compare the cost of Production across different regions.
Opportunities in the Aluminum Industry
Growing electric vehicle market
The market for electric vehicles is growing rapidly in Europe and North America. Many European countries have strict regulations on CO2 emissions, which is driving the demand for high-strength aluminum alloys. These alloys provide superior strength, which is a key requirement for electric vehicles. Since electric vehicles run on battery power, the batteries weigh approximately 25% of the overall car weight. A study by the Aluminum Association showed that by using an advanced aluminum body structure instead of traditional steel, a vehicle's stored energy requirements can be reduced by around 10%. This could save up to USD 3,000 per vehicle, as less power is required to move a lighter vehicle. With the increasing demand for electric vehicles, the market for automotive aluminum casting is also expected to grow. The rising demand for lightweight vehicles, metal replacement, and environmental concerns are influencing the market for cast aluminum. Aluminum is a lightweight material that can assist in reducing the weight of electric vehicles (EVs). This can lead to an improvement in their range, fuel efficiency, and performance. This is particularly significant for battery-electric vehicles (BEVs), which carry heavy battery packs. Additionally, aluminum is a durable and corrosion-resistant material, which makes it well-suited for use in EVs that are often exposed to harsh weather conditions. Moreover, aluminum is a good conductor of electricity. This property is crucial for EV components such as batteries, motors, and wiring.
Snapshot:
| Attributes | Details |
| Market Size in 2022 | USD 161.50 Billion |
| Market Forecast in 2030 | USD 258.49 Billion |
| Compound Annual Growth Rate (CAGR) | 6.01 % |
| Unit | Revenue (USD Million) and Volume (Kilo Tons) |
| Segmentation | By Processing Type, By End-User, By Alloy Type & By Region |
| By Processing Type |
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| By End-User |
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| By Alloy Type |
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| By Region |
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| Base Year | 2022 |
| Historical Year | 2018 - 2022 |
| Forecast Year | 2023 - 2030 |
Segment Analysis of the Aluminum Market
The Aluminum market is segmented by processing type, Product, alloy type and region.
By Processing Type
The Extrusion segment held the largest market share in 2022
Processing Type is sub-segmented into extrusion, casting, forgings, pigments and powders, rod, and bar, sheets and plates. the extrusion segment accounted for the highest market share in the global Aluminum market for 2022. Extrusion is a versatile technique with numerous applications in various industries such as architecture, automotive, electronics, aerospace, and energy. However, the building and construction industry is the largest consumer of extruded aluminum. This metal is widely used in the production of aluminum railings, staircases, panels, and framing components. Extruded aluminum has gradually replaced traditional construction materials such as iron, concrete, and timber. Additionally, it is also used in display equipment, electronic systems, and industrial applications. These factors are likely to influence the demand for extruded aluminum in the foreseeable future.
On the other hand, the beverage segment has a significant market share over the forecast period, Aluminum casting is a widely used process for shaping aluminum into various goods. The versatility of aluminum castings makes them suitable for use in a wide range of applications and environments. They are frequently used in the military and defense sectors, where precise near-net-shape castings with tight tolerances are crucial. They are also used in building & construction, electronics, and other industries. These factors are expected to have an impact on the demand for non-ferrous powder metals during the forecast period.
By End-User
The Automotive segment was the leading segment in 2022:
By End-User, which is divided into construction, automotive, packaging, electrical, consumer durables, machinery and equipment, and others. The Automotive segment accounted for the largest share 30% in the global Aluminum market for 2022. Aluminum is a widely used material in the automotive industry. It is used to make various automotive parts such as engine radiators, wheels, bumpers, suspension parts, engine cylinder blocks, transmission bodies, and body parts like hoods, doors, and frames. Aluminum is preferred for exteriors due to its lightweight, durability, and attractive appearance. Moreover, as the automotive industry is increasingly focused on fuel efficiency and reducing CO2 emissions, aluminum plays a critical role in modern cars. For every kilogram of aluminum used, the weight of a vehicle is reduced by one kilogram. Therefore, aluminum is used to make an increasing number of automotive components, which is driving the demand for this material in the industry.
On the other hand, the Construction segment is anticipated to expand over the forecast period, Aluminum is the second most commonly used metal in construction and building. It is widely used for windows, curtain walls, roofing, cladding, solar shades, solar panels, handrails, stairways, shelves, and other temporary structures. It is also used to construct high-rise buildings, skyscrapers, and bridges. The minimum service life of aluminum structures is 80 years. Aluminum can be used in any climatic condition, and it does not lose its properties in temperatures between -80°C and +300°C.
By Alloy Type
The wrought alloy segment was the leading segment in 2022:
By alloy type, which is divided into cast alloy, and wrought alloy. The wrought alloy segment accounted for largest share in the global Aluminum market in 2022. Wrought alloy production involves subjecting the metal to mechanical processes such as forging, rolling, and extrusion. This results in wrought alloy being mechanically stronger and more ductile compared to cast alloys. Due to its increased usage in various applications, including welding rods, aircraft frames, motorcycle frames, and pressure vessels, high material strength is required. As a result, this alloy segment is expected to experience substantial growth during the forecast period.
Cast Alloy segment is anticipated to register rapid growth in forecast period, cast alloys have a lower price relative to wrought alloys. The specific functionality and cost offered by cast alloys make them irreplaceable in many applications, thus resulting in high segment growth. Cast alloys can achieve high dimensional accuracy, which is essential for components that require precise fit and performance. This is particularly important in applications such as engines and machinery. Cast alloys can be produced in near-net-shape forms, requiring minimal machining or post-processing. This reduces material waste and production costs, making it a more efficient manufacturing process.
Regional Analysis
Asia Pacific occupied the largest market share in 2022:
Asia Pacific has the largest revenue market share 38% in 2022, China is the largest aircraft producer and has the largest domestic air travel market, according to the Civil Aviation Administration of China (CAAC). Over the past five years, the country's civil aircraft fleet has grown, which will lead to an increase in demand for aluminum. In addition to aviation, aluminum foils are widely used in pharmaceutical packaging for tablets, capsules, creams, lotions, liquid medicines, and powder drugs. The packaging market in China is expected to grow significantly, which will boost the demand for aluminum. This growth momentum in the packaging industry will also have a positive impact on the country's food processing sector. The food processing industry is moderately expanding, with a focus on freezing and packaging various products, particularly dairy, baby food, and confectionery products. This trend will further drive the demand for packaging, and hence aluminum consumption in China.
On the other hand, Europe accounted for a significant share over the forecast period, the construction industry is a top priority for the UK government. They had pledged to build one million homes by 2020, and investments in the sector between 2017 and 2021 amounted to USD 383 billion. In the first quarter of 2021, new construction orders increased by 12.2%, equivalent to GBP 1,227 million compared to the previous year's fourth quarter. These growth factors in the construction sector are expected to drive the demand for aluminum in the market.
List of the prominent players in the Aluminum Market:
- China Power Investment Corp. (Cpi)
- East Hope Group Company Limited
- Rio Tinto Alcan Inc.
- Xinfa Group Co., Ltd.
- Aluminum Corporation of China Limited (Chalco)
- Emirates Global Aluminum Pjsc
- Norsk Hydro Asa
- Alcoa Corporation
- China Hongqiao Group Ltd.
- United Company Rusal Plc.
Segmentation Analysis of the Aluminum Market
By Processing Type
- Extrusion
- Casting
- Forgings
- Pigments and Powders
- Rod and Bar
- Sheet and Plate
- Automotive
- Construction
- Packaging
- Electrical
- Consumer durables
- Machinery and Equipment
- Others
- Wrought Alloy
- Cast Alloy
- North America
- Europe
- Asia Pacific
- Latin America
- Middle East and Africa
Impact of the COVID-19 Pandemic on the Aluminum Market:
The COVID-19 pandemic caused extended lockdowns in key manufacturing industries such as construction, automotive, electronics, industrial machinery, and consumer appliances across all regions. This led to short-term production halts and a sudden decrease in demand for Al from the industrial sector. The global market's year-on-year growth rate considerably dropped in 2020 due to supply chain disruptions across key consuming countries in all regions. Additionally, the demand for bauxite ore across all regions was significantly impacted due to a shortage of raw materials and inventory, short-term production halts, economic slowdown, trade restrictions, and changing consumer behavior in response to the COVID-19 outbreak and other reasons. Initially, the prices fell sharply in early 2020 due to the pandemic. However, they rebounded in 2021 as the global economic activity began to recover. Despite remaining volatile throughout the pandemic period, the long-term outlook for the aluminum industry remains positive. Aluminum is a versatile and lightweight material with a wide range of applications. It is expected that the demand for aluminum will grow in the coming years, driven by factors such as urbanization, population growth, and the increasing use of aluminum in sustainable technologies.
