ALUMINUM ALLOYS MARKET ANALYSIS

Market Challenges And Opportunities

Global Aluminum Alloys Market: Growth Drivers

Growing Automotive Industry

Growing automotive industry is expected to drive the market growth. The automotive industry is one of the largest consumers of aluminum alloys. Growing production of automobiles around the globe increases consumption of these alloys, and this is expected to drive the  market growth. For instance, in 2022, according to the European Automobile Manufacturers Association, 10.9 million passenger cars were manufactured in the European Union, indicating increase of 8.3%, as compared to 2021.

Increasing Cargo Transportation

Increasing cargo transportation boosts marine industry growth. Metal such as aluminum is widely used in the shipbuilding industry to reduce the overall weight of the ship without compromising on strength of the ship. Moreover, aluminum alloys are highly resistant to corrosion compared to other metal, and this boosts demand for aluminum alloys in the shipbuilding industry. For instance, United Nations Conference on Trade and Development UNCTAD projects global maritime trade will lose steam, with growth slowing to 1.4% in 2022. For the period 2023–2027, it is expected to grow at 2.1% annually – slower than the 3.3% average recorded during the past three decades.

Global Aluminum Alloys Market: Restraints

Environmental Regulations

Environmental concerns such as increasing pollution and growing energy costs are compelling government to implement strict rules and regulations for the production of aluminum alloys. This factor is expected to hinder the market growth over the forecast period. However, aluminum industry are taking initiatives to address these concerns. There is growing trend towards adoption of sustainable practices such as recycling aluminum and reducing greenhouse gas emissions. This helps to alleviate the environmental impact of aluminum production, and maintain its market growth. Energy efficiency research and development (R&D) will further reduce the industry’s exposure to rising energy costs. Overall,  to overcome these challenges, the aluminum industry is actively working towards finding solutions.

High Cost of Fabrication Process

Expensive fabrication process coupled with availability of the other low-cost substitute products is expected to restrict the adoption of aluminum alloys. Steel is one of the common substitutes that is widely used across various industries instead of aluminum. This factor is expected to restrict the market growth. Despite the challenges posed by the expensive fabrication process and the availability of low-cost substitute products, the market for aluminum alloys can find its counterbalance through several factors.