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

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

US Commerce Department Announces Some Aluminum Tariff Relief

After levying strong tariffs on aluminum, steel and a host of other products earlier this year,...

August 30th, 2018

What Do You Know About The Industrial Metals Market?


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China May Benefit from Trump’s Aluminum Tariffs

A new report shows the US-imposed aluminum tariffs are actually benefiting China, which remains one of...

August 13th, 2018

Rio Tinto Gathers Final Pieces for Amrun

With just one final piece of outstanding infrastructure in progress, Rio Tinto has secured some of...

June 21st, 2018

What Do You Know About The Industrial Metals Market?


Find market data and industry insights in your free report


US Tariffs on Canadian Aluminum to Impact American Manufacturers

Citing national security, the US issued a series of tariffs on Canada and other trade partners...

June 5th, 2018

Alcoa Shuts Down Warrick Potline Following Power Outage

Aluminum-focused Alcoa has shut down one of three potlines included in the restart of its Warrick...

May 28th, 2018
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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. 

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