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Global demand for aluminium

Aluminium is recyclable and that is why it is important that end-of-life products with aluminium content are collected. Environmental benefits of recycling are great, because, among other things, recycled aluminium (secondary aluminium) only requires approximately 1/20 of the amount of energy it takes to manufacture aluminium from aluminium oxide (called primary aluminium).

The available quantities of recycled aluminium are, however, far from enough to satisfy market demand.

From 2000-2009, there was an average annual increase of 3.8% in the consumption of primary aluminium. Industry analysts expect (March 2010) that the figure will rise to 4.3% per year in the period 2010-2020.

Direct correlation with the world economy

Aluminium is, like steel, copper and other base metals, a very cyclical product. When the global economy boomed in 2006-2008, demand for aluminium was very high and there was speculation in the continuing price rises. With the world recession in 2008-09, there was again a sudden and sharp decline in demand for aluminium. As production could not be reduced just as quickly, it meant that the market was saturated with metal and stocks increased significantly, while the aluminium price fell sharply.

This meant that a large part of the industry was loss-making and a number of plants closed temporarily or permanently.

The slow improvement of the world economy in the first half of 2010 has again led to increased demand. The aluminium price has therefore increased to a level at which the industry is profitable.

Industry analysts expect that production of primary aluminium in 2010 will exceed the previous peak of 2007, and that there will be a steady growth in demand. In this way, within a few years there will again be the need for the construction of new smelter plants.

The growth comes in new markets

The highly developed countries such as the USA and Western Europe, have a high aluminium consumption, approximately 25-30 kg per capita per year. In industry forecasts, the consumption of primary aluminium in developed countries is not expected to increase above the current level. They can thus be said to have reached “saturation” point, while the least developed countries do not yet have the basis to demand as much aluminium.

Many countries that have begun an intensive industrialisation, such as China and India, have a soaring consumption of aluminium and will be of greater and greater significance for future developments in demand.

Read about the global aluminium production here.