Norsk Hydro Provides Update on Cyber Attack

Norsk Hydro, one of the world's largest producers of aluminum, says that most production is running...

March 21st, 2019

Alcoa Performs Well in Q4, Alumina Demand Up

Over the final quarter of 2018, the company brought in net income of US$43 million, with...

January 17th, 2019

Aluminum Outlook 2019: US-China Trade War to Drive Pricing

What's the aluminum outlook for 2019? Read on to find out experts' thoughts about the market...

December 27th, 2018

Rio Tinto to Supply Nespresso with Ethical Aluminum for...

The convenient coffee pods, which are widely used by a variety of manufacturers, have come under...

November 19th, 2018

Alcoa Reports US$41-million Net Loss in Q3

Despite being in the red for the third fiscal quarter of the year, the US-based aluminum...

October 18th, 2018

8 Top Aluminum-producing Countries

What are the top aluminum-producing countries? China's output was the highest by far in 2017, clocking...

October 18th, 2018

Norsk Hydro Ends All Production at Brazilian Aluminum Plant

Norsk Hydro began reducing production at the site in March following a series of embargoes from...

October 4th, 2018
<< Older Posts
Aluminum is a silvery-white metal that is non-toxic and resists corrosion. It has high thermal conductivity, and is the most abundant metal in the Earth’s crust. The metal is found in the minerals bauxite and cryolite, and was first extracted in 1825. Often aluminum is alloyed with other metals, such as copper, magnesium, silicon, tin, zinc and manganese. Aluminum alloys are lightweight and strong, which makes them desirable for the construction of aircraft and spacecraft. An alloy of boron and aluminum is used for electric power cables for transmission lines, and the metal is also used to make cans, foils and kitchen utensils; additionally, it can be deposited on the surface of glass to make mirrors. If you’re interested in the aluminum industry, read...

Aluminum is a silvery-white metal that is non-toxic and resists corrosion. It has high thermal conductivity, and is the most abundant metal in the Earth’s crust. The metal is found in the minerals bauxite and cryolite, and was first extracted in 1825.

Often aluminum is alloyed with other metals, such as copper, magnesium, silicon, tin, zinc and manganese. Aluminum alloys are lightweight and strong, which makes them desirable for the construction of aircraft and spacecraft. An alloy of boron and aluminum is used for electric power cables for transmission lines, and the metal is also used to make cans, foils and kitchen utensils; additionally, it can be deposited on the surface of glass to make mirrors.

If you’re interested in the aluminum industry, read on for a brief overview of the metal, from supply and demand to how to invest.

Aluminum investing: Supply and demand

China is the world’s largest producer of aluminum, but supply from the Asian nation has faced restrictions lately. In June 2017, Bloomberg reported that China’s largest aluminum smelter will be cutting its capacity by 250,000 MT annually. The country is planning to restrict production as part of the government’s Winter 2017 Air Quality Pollution Prevention Plan. Under the plan, aluminum industry producers in 28 cities are reducing their aluminum output by over 30 percent. 

China’s aluminum market is also facing external pressure. In April 2017, the US Department of Commerce launched a trade probe to investigate whether Chinese aluminum imports pose a threat to the country’s national security. Government officials said only one US firm produces the high-purity aluminum used for American combat aircraft. The probe could lead to the US imposing tariffs on aluminum imports.

Concerns about Chinese supply have caused aluminum to outperform other metals on the LME. Goldman Sachs (NYSE:GS) said midway through 2017 that it expects aluminum prices to rise to $2,000 in six months and to $2,100 in 12 months.

As aluminum supply tightens, demand from many sectors is poised to grow. A Global Market Insights report estimates that the aluminum alloys market will exceed $150 billion by 2024. Global factors projected to drive demand and contribute to aluminum price gains include: increasing air travel, growing construction and infrastructure projects in countries with emerging economies.

What’s more, Research and Markets expects aluminum use in the global automotive industry to reach $42.4 billion by 2022, with the Asia Pacific region as the largest consumer. Growth will be driven by increasing vehicle production, government emissions regulations and rising gas prices.

Aluminum investing: How to start

Recent aluminum price gains have been reflected in the share prices of major aluminum companies, and for that reason many investors want to invest directly in aluminum-focused companies. For instance, the share price of American aluminum firm Alcoa (NYSE:AA), which produces one-fifth of the world’s aluminum, rose about 15 percent in the first half of 2017. You can read more about other major aluminum producers by clicking here.

Other options for investing in the aluminum industry include the iPath Pure Beta Aluminum ETN (ARCA:FOIL), which is an exchange-traded note that delivers returns through a futures-based strategy. In addition, ETF Securities offers leveraged and inverse aluminum exchange-traded products in European markets, along with traditional long-exposure funds. Exchange-traded funds such as ETFS Aluminium (LSE:ALUM), which invests in firms mining and selling aluminum, are another option.

Finally, the LME offers aluminum futures contracts quoted in US currency per tonne with each contract representing 25 tonnes. The primary aluminum cannot contain impurities greater than in the registered designation P1020A in the North American and International Registration Record entitled “International Designations and Chemical Composition Limits for Unalloyed Aluminum.”

This description was last updated in July 2017. 

Get the latest Aluminum Investing stock information

Get the latest information about companies associated with Aluminum Investing Delivered directly to your inbox.

Aluminum Investing