Global Aluminum Industry. The world production of bauxite dropped by 7% in 2009 compared to 2008, alumina decreased with 6% from 2008 to 2009, and aluminum fell by almost 7% in the same period, due to the global financial crisis and global recession.

Authors Avatar

The global aluminum industry

Aluminum is representing the second largest metal market in the world. The world production of bauxite dropped by 7% in 2009 compared to 2008, alumina decreased with 6% from 2008 to 2009, and aluminum fell by almost 7% in the same period, due to the global financial crisis and global recession. China has become the leading producer of alumina and aluminum, and taken over Brazil’s position as second in bauxite production.

Aluminum is primarily used to produce pistons, body of cars, aircrafts, beverage cans, engines, siding and aluminum foil, due to its characteristic of being light, pliable, recyclable and resistant to rust. Aluminum is produced from two sources: ore (primary), also called bauxite, and scrap (recycled aluminum / secondary). Due to high energy requirements, the primary producers locate in areas with access to low energy costs sources, e.g. hydroelectric power, and the secondary near industrial centers. Alumina, the main source of aluminum, is sold on both spot and contract terms, and the price is quoted on London Metal Exchange. Asia is the largest region of aluminum production with 43% market share, followed by Europe (24%) and America (22%). Transportation (26% market share), packaging (22%) and construction (22%) are the largest aluminum consuming industries.

Join now!

The supply and demand balance is driven by adjusting the alumina production to meet the demand, due to the vertically integrated nature of the major firms.  However, the significance of China’s increased production has lead to shortage in the refining capacities, leading to a historical high demand for alumina. The Chinese economy accounts for almost a quarter of the world’s aluminum consumption, and a forecasted increase in the automotive industry and growth in urban population is predicting a significant increase in demand the coming years. Also, proposed regulations on CO2 from EU and increasing price of substitutes for aluminum are drivers ...

This is a preview of the whole essay