Aluminum News: AEC Files Petition Against China's Zhongwang

The US Aluminum Extruders Council filed a petition against Chinese aluminum extrusion producer Zhongwang Holdings for...

October 26th, 2015

What Does the Alcoa Split Say About the Aluminum...

Alcoa has decided to divide its struggling raw metals business from its lightweight automotive and aerospace...

October 5th, 2015

Alcoa Invests $60 Million in 3D Printing Technology

The $60-million expansion of the Alcoa Technical Center in Pennsylvania is aimed at accelerating the development...

September 7th, 2015

Investing in Aluminum: What Investors Need to Know

There are a few different ways to go about investing in aluminum. Here's a look at...

July 28th, 2015

Aluminum Price Outlook: BMO Says 'Lower for Longer'

Other than a brief price spike in May, the aluminum price hasn't performed well this year....

July 14th, 2015

The Aluminum Recycling Revolution

Here's a look at the history of aluminum recycling and what a few companies are doing...

April 5th, 2015

New Bauxite Mines Set to Benefit from Aluminum Deficit?

Construction has begun on the first bauxite mine in Tasmania in 30 years as the bauxite...

January 7th, 2015

Aluminum Outlook 2015: Hope in Deficit

Aluminum has been having a tough time for quite awhile, but it's looking like 2015 may...

December 25th, 2014
FAQ

Alcoa Develops New Aluminum Process

Lightweight metals leader Alcoa Inc. (NYSE:AA) plans to aim its new way of making aluminum sheet...

December 8th, 2014

Alcoa Looking to Benefit from Rising Aluminum Prices

Alcoa Aluminum has seen tremendous gains as it manages a changing aluminum market

September 23rd, 2014
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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