Economics
How the World Aluminium Market Works
It may be hard to believe but only 150 years ago aluminium was considered to be silver from clay and an extremely expensive kind of metal. Today, aluminium ranks number two in the consumption volumes among all the metals, surpassed only by steel. In the coming decades the demand for aluminium will continue increasing at unstoppable rates. Recent developments in the motor industry, the rapid growth of cities, new potential uses of aluminium as a substitute to copper in the power industry – these and many other trends mean that the winged metal is well placed to strengthen its dominant position as a key structural material of the 21st century.
Volume of production bauxite, alumina
and aluminium in the world (mt)
In 2014 global aluminium production have reached 54 mln tonnes. The ex-China aluminium market was in shortfall of 1.2 million tonnes.
According to CRU and International Aluminium Institute in the first half of 2015 aluminium production in the world outside ex-China grew by 2% YoY to 13 million tonnes. This growth was mainly from Asia and the Middle East, with South and North America leading the decline in production.
Overcapacity in the Chinese aluminium market continued throughout the first half of 2015. As a result total aluminium stocks in China in the first half of 2015 reached 2.65 million tonnes.
From January to May 2015, Chinese installed aluminium capacity rose by 1.0 million tonnes per year to 36.545 million tonnes.
The main change to the supply environment resulted from the export of aluminium semis from China. Net exports of semis rose by 47% YoY in the first half 2015. Due to a seasonal slowdown in the domestic market, aluminium product manufacturers had to export, even at a loss, in order to generate cash flow.
As a result of both rising Chinese semi exports and growth of ex-China aluminium production, RUSAL estimates that the global aluminium market faces a minor surplus of 277,000 tonnes in FY15.
In 2014 global aluminium production have reached 54 mln tonnes. The ex-China aluminium market was in shortfall of 1.2 million tonnes.
According to CRU and International Aluminium Institute in the first half of 2015 aluminium production in the world outside ex-China grew by 2% YoY to 13 million tonnes. This growth was mainly from Asia and the Middle East, with South and North America leading the decline in production.
Overcapacity in the Chinese aluminium market continued throughout the first half of 2015. As a result total aluminium stocks in China in the first half of 2015 reached 2.65 million tonnes.
From January to May 2015, Chinese installed aluminium capacity rose by 1.0 million tonnes per year to 36.545 million tonnes.
The main change to the supply environment resulted from the export of aluminium semis from China. Net exports of semis rose by 47% YoY in the first half 2015. Due to a seasonal slowdown in the domestic market, aluminium product manufacturers had to export, even at a loss, in order to generate cash flow.
As a result of both rising Chinese semi exports and growth of ex-China aluminium production, RUSAL estimates that the global aluminium market faces a minor surplus of 277,000 tonnes in FY15.
World’s largest aluminium producers
kt
5 000
|
||||||||||
4 000 | ||||||||||
3 000 | ||||||||||
2 000 | ||||||||||
1 000 | ||||||||||
0 |
UC Rusal
6.7%
|
Chalco
6.2%
|
Rio Tinto
6.2%
|
Hongqiao Group
5.8%
|
Alcoa
5.8%
|
CPI
4.9%
|
EGA
(Dubal+Emal) 4.3%
|
Xinfa
4.3%
|
Norsk
Hydro 3.6%
|
East
Hope 2.6%
|
group
(dubai + emal)
In 2014 four largest aluminium producers in the world have reduced the production of the metal. Meanwhile the rest of the TOP-10 companies have increased output
by 300-400 thousand tonnes. Norwegian producer Hydro had the fastest production growth – from 1.25 to 1.96 million tonnes.
In 2014 four largest aluminium producers in the world have reduced the production of the metal. Meanwhile the rest of the TOP-10 companies have increased output
by 300-400 thousand tonnes. Norwegian producer Hydro had the fastest production growth – from 1.25 to 1.96 million tonnes.
Aluminium production
and consumption in the world
(kt)
kt
60 000
|
|||||||||||||||
50 000 | |||||||||||||||
40 000 | |||||||||||||||
30 000 | |||||||||||||||
20 000 | |||||||||||||||
10 000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0 | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 |
Global aluminium demand in 2014 rose by 7%, mainly as a result of stronger demand in North America and China in the fourth quarter of 2014. At the same time, demand in emerging markets including Russia, Latin America and India showed lower consumption in the fourth quarter of 2014 and as a result missed expectations for the entire 2014 forecast.
In the first half of 2015, global aluminium demand rose by 6.3% to 28.6 million tonnes as a result of stronger demand in North America and the EU. Within the BRIC economies, the growth of Indian demand has been a key contributor to growth.
Demand for aluminium in North America improved by 5.6% in comparison with 2014. Statistics from the Aluminum Association indicate that the year-to-date new mill orders index increased by 5.8% in the first half of this year, whereas shipments of aluminium extruded products by U.S. and Canadian producers increased by 9.0%. Aluminium demand in Europe grew by 2.3% year-on-year.
Turkey, Italy, France and Germany represent the key growth markets, respectively increasing consumption by 6.1%, 2.6%, 2.4% and 1.1%.
Excluding China, primary aluminium consumption in Asia increased by 1.3% in 1H 2015 compared to the same period in 2014.
On the negative side, Japan’s industrial output decreased in May by 4% YoY as a slowdown in the production of transport equipment and cars weakened the recovery. Industrial production in the Republic of Korea decreased by 2.8% YoY and 1.3% month-on-month in May. Automotive production in South Korea fell by 3.3% YoY in January-May 2015. Consequently, South Korea’s primary aluminium consumption growth slowed to 2.4% in 1H 2015. China’s primary aluminium apparent consumption was 14.6 million tonnes in 1H 2015, up by 10.4% YoY. Chinese GDP growth on a yearly basis was better than expected, reaching 7%.
Global aluminium demand growth in 2015 is expected to be 6% reaching 58 million tonnes.
Global aluminium demand in 2014 rose by 7%, mainly as a result of stronger demand in North America and China in the fourth quarter of 2014. At the same time, demand in emerging markets including Russia, Latin America and India showed lower consumption in the fourth quarter of 2014 and as a result missed expectations for the entire 2014 forecast.
In the first half of 2015, global aluminium demand rose by 6.3% to 28.6 million tonnes as a result of stronger demand in North America and the EU. Within the BRIC economies, the growth of Indian demand has been a key contributor to growth.
Demand for aluminium in North America improved by 5.6% in comparison with 2014. Statistics from the Aluminum Association indicate that the year-to-date new mill orders index increased by 5.8% in the first half of this year, whereas shipments of aluminium extruded products by U.S. and Canadian producers increased by 9.0%. Aluminium demand in Europe grew by 2.3% year-on-year.
Turkey, Italy, France and Germany represent the key growth markets, respectively increasing consumption by 6.1%, 2.6%, 2.4% and 1.1%.
Excluding China, primary aluminium consumption in Asia increased by 1.3% in 1H 2015 compared to the same period in 2014.
On the negative side, Japan’s industrial output decreased in May by 4% YoY as a slowdown in the production of transport equipment and cars weakened the recovery. Industrial production in the Republic of Korea decreased by 2.8% YoY and 1.3% month-on-month in May. Automotive production in South Korea fell by 3.3% YoY in January-May 2015. Consequently, South Korea’s primary aluminium consumption growth slowed to 2.4% in 1H 2015. China’s primary aluminium apparent consumption was 14.6 million tonnes in 1H 2015, up by 10.4% YoY. Chinese GDP growth on a yearly basis was better than expected, reaching 7%.
Global aluminium demand growth in 2015 is expected to be 6% reaching 58 million tonnes.
Aluminium consumption by industry (kt)
and packaging
engineering
& equipment
Demand for aluminium form the carmakers is expected to grow by 7% in 2015 as car sales combined with the aluminium content in cars rising significantly. Automakers consumed a record amount of aluminium last year as plummeting prices and technological breakthroughs made it a viable alternative to steel.
Temporal plunge in oil price will create additional demand for cars as according to the US market statistics, in January 2015 sales increased by nearly 14% and over half of sales comprised of high priced pickups and sport-utility vehicles.
Demand for aluminium form the carmakers is expected to grow by 7% in 2015 as car sales combined with the aluminium content in cars rising significantly. Automakers consumed a record amount of aluminium last year as plummeting prices and technological breakthroughs made it a viable alternative to steel.
Temporal plunge in oil price will create additional demand for cars as according to the US market statistics, in January 2015 sales increased by nearly 14% and over half of sales comprised of high priced pickups and sport-utility vehicles.