Aluminum Market Cost Structure, Growth Opportunities 2030

Aluminum is largely consumed by the automotive industry, as it has been the most favoured material used in the manufacturing of most of the automotive parts. The industry has favoured aluminum alloys mainly for their low cost and lightweight properties. However, the continual need for more versatile material properties, sustainability, and even lower costs of materials is triggering the end users to discover materials that offer even better performance characteristics.

While plastic is gaining more and more popularity in the automotive industry, recent studies also show that zinc alloys are emerging as a better choice than aluminum or magnesium alloys for automotive manufacturers. Zinc is known to be more sustainable than aluminum and it also shows superior properties alongside traditional factors such as flexibility, cost, and time.

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High Degree of Vertical Integration to Remain a Mega Trend in the Aluminum Market

The global aluminum market has always exhibited the characteristics of both upstream as well as downstream integration. However, the overall production capacity of the leading producers in the global aluminum market has increased significantly in the past few years, which is triggering the other market players to modify their strategies in order to consolidate their position in the market.

As a result of the increasing need for improving operational efficiency and attaining a stronger competitive position, vertical integration is emerging as a major trend in the aluminum market. Furthermore, companies that have a complete access to raw materials can also have more benefits of the strategy of vertical integration, and a majority of these companies are integrating their entire value chains to gain complete control over all their supply chain operations.

The Impact of COVID-19 Calamity on Supply-Demand Balance in the Aluminum Market

Since the global outbreak of the novel coronavirus, the prices of aluminum have fallen by nearly 21% between January and April 2020, as the global aluminum market witnessed diminishing demand from the key end-user industries, such as construction and transportation. Furthermore, the demand from smelters also accounted for an increase in inventories, which also weakened the investment activities in the market.

The heavy impact of the COVID-19 pandemic on the key consumer sectors is likely to remain the most significant factor influencing growth prospects of the global aluminum market. End users from the key industrial areas such as construction, transportation, automotive, and consumer goods, are witnessing worker shortage, which may further hamper the aluminum sales worldwide for a significant period of time.

Aluminum Market: Region-wise Analysis

The global aluminum market is geographically segmented into seven regions – North America, Latin America, Europe, East Asia, South Asia, Oceania, and Middle East & Africa. Geographically, China is the most dominant market for aluminum. It does not only account for the largest revenue share in the global aluminum market, but it also has a stronghold on the global sales of industrial commodities including zinc, copper, and steel. However, the National Bureau of Statistics (NBS) reported that the annual aluminum production inChina fell for the first time since 2009, in 2019, attributing to the large-scale smelter outages and the US-China trade war.

Apart from China, Russia and Canada are also among the leading, aluminum-producing countries in the world. In June 2020, the Trump Administration announced that it may reimpose tariffs on the imports of raw Canadian aluminum into the United States.

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Aluminum Market: Competitive Landscape

• Aluminum Corp. of China Ltd.
• BHP Billiton Ltd.,
• Vedanta Resources plc
• Norsk Hydro ASA
• United Co.
• RUSAL
• Dubai Aluminum Co. Ltd.

Region-wise Analysis

• North America (U.S., Canada)
•  Latin America (Mexico, Brazil)
•  Europe (Germany, U.K., France, Italy, Spain, Poland, Russia)
•  East Asia (China, Japan, South Korea)
•  South Asia (India, Thailand, Malaysia, Vietnam, Indonesia)
•  Oceania (Australia, New Zealand)
•  Middle East & Africa (GCC Countries, Turkey, Northern Africa, South Africa)

Aluminum Market: Segment Analysis

The aluminum market can be segmented on the basis of the following: