Both the second most used metal in the world and the second most abundant metallic element on earth, aluminum plays a central role in global economic and industrial production. This sustainable material has long reigned as an integral part of modern life, as evidenced in its many applications in transportation, construction, packaging and other consumable products. As the global economic value of the material shifts, so do the future growth opportunities for aluminum use.
The history of aluminum is a story of innovation, international collaboration and the gradual development of a global economy.
Although many had used a form of aluminum for centuries for its astringent and dye properties, it wasn’t until 1825 that Hans Christian Oersted, a Danish chemist, first isolated impure aluminum oxide from bauxite ore. Two years later, German chemist Friedrich Wohler successfully isolated the pure metal from raw materials.
In 1886, Charles Martin Hall and Paul L. T. Héroult discovered a process for extracting aluminum from bauxite using electrolysis. The first large-scale production of pure aluminum began two years later at an industrial plant in Pittsburgh, Pennsylvania, helping to increase demand and decrease costs. As its popularity grew, new material extraction methods developed, and aluminum soon solidified its ranking as an invaluable industrial material.
The high strength-to-weight ratio, corrosion resistance and thermal conductivity of aluminum have bolstered its reputation as a versatile material for many industries and unlocked endless technological capabilities.
With the rise of production, more engineering and construction applications for aluminum arose. Regions with access to the material saw greater building heights, larger and stronger aircraft, and improved performance in cars and trucks. In part due to the World Wars generating demand for steel, aluminum soon became a popular material for consumer goods such as cookware and utensils. By the mid-20th century, consumers across the globe could find aluminum in everyday products.
The economic contribution of aluminum is significant — it provides jobs, generates tax revenue and drives innovation across industries through its use as a raw material for many products. By 2027, the global aluminum market is projected to reach 210 billion U.S. dollars. In the United States alone, the aluminum industry supports over 600,000 jobs.
Aluminum is a major export commodity, meaning some countries have more than they need, while others lack the resources or equipment to produce aluminum products.
Bauxite is mined in many countries, but not all possess the smelters to turn it into aluminum ingots or other forms of metal. On the other hand, countries that don’t have the necessary bauxite reserves must import raw materials from those with abundant supplies. Because of this, aluminum is traded on multi-commodity exchanges such as the Shanghai Futures Exchange, Chicago Mercantile Exchange and the London Metal Exchange.
Because of its strength, durability, flexibility and relatively low weight, aluminum functions as a valuable resource for many different industries, including:
The future of aluminum’s uses and applications looks very bright. In the coming decades, many expect to see new uses for aluminum aimed at making the public’s lives safer, healthier and more sustainable. One area of significant projected growth includes the electric vehicle market, which will likely expand as more people begin to buy them and research determines how to make them lighter and increase their range. Other areas that show great promise include renewable energy systems such as solar panels and wind turbines.
As an energy-intensive industrial process, aluminum production raises concerns over:
As a result of widespread use, aluminum significantly impacts the environment through its production, recycling and disposal. However, this negative impact is somewhat offset by modern sustainability efforts and its exceptional recyclability rate — roughly 75% aluminum ever produced is still currently in use.
Countries paving the way in aluminum policy and regulation reforms include:
The global aluminum industry produced an estimated 68 million tons in 2021, with the largest aluminum-producing countries being China, Russia, India and Canada. China led the pack at 39 million metric tons of production. Hongqiao Group, Shandong Xinfa, Alcoa and Rio Tinto held rank as some of the largest aluminum producers worldwide.
The global aluminum industry has rapidly shifted toward greener production in recent years, with stricter regulations on emissions and waste. Although many experts predict production costs will rise due to these changes, the International Aluminium Institute (IAI) still expects the global demand for aluminum to continue increasing in the coming decades.
With this fantastic news for investors and consumers alike, businesses can expect to see more opportunities to grow their bottom lines and invest in new technologies to help them meet rising demand.
In the last few years, the aluminum industry has seen a rise in:
Despite these challenges affecting how aluminum drives international trade, new trends and opportunities are on the horizon within adjacent industries such as the:
Aluminum is a crucial element of the global economy, and its role there is only expected to grow as we move into the future. To stay informed about the aluminum market and gain access to market outlooks, data analysis and more, subscribe to HARBOR Aluminum’s Market Intelligence Reports.
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