Aluminium (Al) is a lightweight, durable silver-white metal that is widely used in construction, transportation, packaging and many other industries. It is the most abundant metal in the Earth's crust and the most widely used nonferrous metal.
Aluminium is produced by the extraction of Bauxite rock from the ground. The bauxite is further processed using the Bayer process into alumina, which is then processed using the Hall–Héroult process, resulting in the formation of aluminium metal.
Based on applications, the Aluminium market is divided into Transportation, Foils & Packaging, Construction, Consumer Goods, Machinery & Equipment and Electrical & Electronics. The transportation segment dominates the market owing to the increasing demand for automobiles. It is used in the production of vehicles such as cars, trucks, trains and aeroplanes.
Aluminium’s light weight can help in reducing the weight of the car which will help in improving the overall efficiency. Due to its lightweight feature, Aluminium is commonly used in the production of aircraft structures, which include wings landing gear, and fuselages. Aluminium is also used in the production of beverage cans, packaging films electrical transmission lines, etc.
Asia Pacific dominates the Aluminium market with countries such as China, India, and Indonesia experiencing rapid growth in the consumption of the metal. This trend is driven by urbanization, industrialization, and infrastructure development in the region.
There has been a growing focus on sustainability in the aluminium industry, with companies investing in cleaner production methods and recycling technologies. This trend is driven by the need to reduce the carbon footprint of the industry and meet the growing demand for sustainable materials.
In April 2023, Porsche and Norsk Hydro ASA announced a collaboration for the production of sustainable Aluminium to reduce the CO2 footprint of aluminium in the automotive industry.
Rio Tinto and BMW have also signed a MOU to manufacture and embed low-carbon aluminium into BMW’s supply chain, under which Rio Tinto will look to provide responsibly sourced aluminium to BMW’s vehicle production plant in Spartanburg, South Carolina, for use in body components from 2024.
Aluminium offers several advantages over other materials such as steel, including being lightweight, corrosion-resistant, and easily recyclable therefore it is widely used in the construction, transportation, packaging, and electrical industries, among others. The growing demand from these industries is a major driver of the aluminium market.
Aluminium is widely used in the packaging industry, as it provides a lightweight and durable solution for food and beverage packaging. With the growing demand for convenience food and beverage products, the use of aluminium in packaging is expected to increase in the coming years. It is used in the manufacture of packaging containers which helps in retaining the flavour and temperature of the food. The rising demand for ready-to-eat food owing to the hectic schedules and increasing purchasing power of consumers is influencing the market positively.
In 2022, Ball announced the construction of the UK’s largest aluminium packaging plant. This new facility will be the largest-ever beverage packaging plant in the UK and is set to start production by 2023.
The prices of raw materials such as bauxite, the primary source of aluminium, can be volatile, leading to fluctuations in the cost of production and prices of aluminium.
The production of aluminium is energy-intensive and can lead to greenhouse gas emissions and other environmental concerns. This can result in regulatory challenges and increased costs for the industry.
Aluminium refining procedures use different levels of electricity and water, which can cause higher carbon emissions, create air and water pollution, and even noise and heat pollution.
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