This report analyses global production, consumption and prices of aluminium. While leading aluminium production giant, China, is struggling with looming energy crisis and disruptions in supply of raw materials, global production of aluminium is set to maintain growth, thanks to expanding Indian, Canadian and Gulf production outputs. Aluminium prices are projected to cool down towards the end of 2022 and stabilise in 2023 as countries find ways to replace Russian aluminium production.
Aluminium prices are expected to cool down towards the end of 2022, as countries find alternative supply options to replace losses from the Russian market. Moreover, Chinese trade limitations amidst its persisting zero-COVID-19 policy are expected to be lifted, allowing the largest global aluminium producer to utilise its production on the global market.
The construction sector was among the key drivers of the recovery in aluminium demand, however, the phasing out of subsidies, elevated uncertainties, rising essential commodities prices and projected rise in borrowing costs are anticipated to lead to slower residential construction demand over the forecast period. Likewise, economic uncertainty is likely to cool demand for new vehicles, slowing down the automotive industry’s demand for aluminium products.
Machinery demand grew after COVID-19 as industrial activities picked up. Moreover, automation becomes an important investment as companies deal with labour shortages and aim to mitigate risks of potential shutdown due to virus spread as occurred during the COVID-19 pandemic. Moreover, given the looming food crisis due to Russia’s invasion of Ukraine, agricultural machinery is expected to gain momentum as countries aim to boost productivity and yields.
Rising emissions permit costs, increasing pressure from society and governmental regulations push the aluminium industry to seek solutions to reduce its carbon footprint. Sustainability is projected to become an important trend in the industry over the long term. Companies are also expected to invest in recycling of scrap metal waste aiming to lower the negative environmental impact of their production.
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