ALUMINUM MARKET ANALYSIS

Aluminum Market Size and Trends

The global aluminum market is estimated to be valued at USD 244.79 Bn in 2024 and is expected to reach USD 380.40 Bn by 2031, exhibiting a compound annual growth rate (CAGR) of 6.5% from 2024 to 2031.

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The aluminum market has seen consistent growth over the past few years and further growth is expected owing to increasing demand from end-use industries such as construction, transportation, packaging, and consumer goods.

Market Driver - Rising demand from automotive industry

The automotive industry has been a major consumer of aluminum over the past few decades. Aluminum is increasingly being used to manufacture various auto components due to its lightweight property which helps improve fuel efficiency. With mounting concerns about carbon emissions and strict fuel economy standards being introduced worldwide, automakers are under pressure to reduce the weight of vehicles.

This has prompted many automakers to replace steel with aluminum wherever possible. Components such as engine blocks, hoods, body panels, and wheels are now commonly made using aluminum alloys instead of steel. Some premium cars have aluminum content upwards of 50% which has helped their fuel economy and performance. With more sophisticated production technologies, even complex die-cast aluminum components are replacing steel parts. The use of aluminum is also rising in trucks and commercial vehicles where payload capacity is important.

Electric vehicles present a huge opportunity for aluminum since they use more aluminum than conventional vehicles. The automotive aluminum demand is further stimulated by the growth in global vehicle production. As developing economies urbanize rapidly and individual incomes rise, the auto sales are surging in countries like India and Indonesia. Even mature markets like the U.S. and China still have room for more vehicle ownership which will sustain their automotive production. With stricter emission rules getting implemented worldwide, this shift towards more aluminum per vehicle seems irreversible. Hence the automotive segment is projected to remain the largest end-use industry for aluminum in the coming years.

Increasing Usage in Construction Sector

The construction industry globally has been one of the major consumers of aluminum. Aluminum finds wide application in construction right from exterior to interior applications due to properties like corrosion resistance, lightweight, and easy formability. Curtain walls, window frames, doors, and roofing are commonly made using aluminum alloy sheets. Aluminum is also used significantly in making prefabricated modular construction where lightweight and strength are important factors.

Rising disposable incomes have been driving more investments in residential and commercial building development across major countries. The growth in infrastructure projects related to highways, metros, and airports has also augmented the demand. Moreover, tightening energy efficiency regulations are pushing builders to use more sustainable materials like aluminum which offers high insulation too. Aluminum does not require much maintenance and has longer service life than wood or Poly Vinyl Chloride alternatives.

Being non-combustible it is also gaining preference in high-rise building construction. Anthropic global warming has also made sustainability a top agenda and aluminum production emits much lower carbon than other metals. All these factors are contributing to higher aluminum consumption from the construction sector not just in developed countries but also emerging economies with their ambitious infrastructure development plans. Cities worldwide are expected to undergo major transformation and redevelopment in the coming decade which bodes well for aluminum demand from this end-use segment.