Commodity: aluminum

Aluminum is one of the most abundant metals in the world, often mined from bauxite ore. The main end users of base metals include the following sectors: transportation and construction. Together, these two sectors account for almost half of the market. Guinea, Australia and Vietnam are considered to be the countries with the largest bauxite reserves, while China leads in the proportion of aluminum smelting production.

As markets reassessed their expectations of fiscal support from the Chinese government, which limited projections of industrial expansion, aluminum futures fell to around $2,600 per tonne from the four-month high of $2,670 set on July 24th. While the Chinese government did not clearly suggest targeted stimulus measures for consumers, it did indicate that it will continue to maintain permissive fiscal and monetary conditions to support the number of manufacturing projects commissioned to boost activity. Although the current production pace is on track to meet the yearly maximum of 45 million tons, which was initially set to support carbon emission objectives, Chinese output was still expected to slow this year. This coincided with higher demand in Europe as EU members raise investment in defense. Supply for European factories is already limited due to sanctions of major producer Russia.

In terms of demand, the main aluminum markets include China, the United States, Germany, India and Japan. The aluminum market is assessed to reach USD 112 billion by 2021 and is expected to reach a CAGR of over 6% during the forecast period 2022-2027. The Asia-Pacific region is expected to be the largest aluminum consuming market during the forecast period.