Extracted from bauxite, aluminum is mainly produced in China. This country accounts for 27% of world production, and far outstrips the United States and Russia, which between them produce only 27%.
Is the aluminum market promising ?
Aluminum is widely used in the automotive and aerospace industries due to its very high conductive performance. It is also very light and very attractive. It is the only metal that manages to compete with copper in the construction sector.
It is also in high demand from the food industry because it resists corrosion well, notably in the production of food cans, containers and drink cans. It also seems that its lightness and its very aesthetically pleasing gray color, reminiscent of the beauty of silver, have made aluminum a fashionable decorative element, particularly in the manufacture of double-glazed doors and windows.
These details therefore allow us to state that the aluminum market is still promising. Recently, the price of this metal experienced a negative correction of 0.52%. The tonne is currently trading at 1805 dollars on the LME.
Current market situation
Major aluminum trading takes place on the LME, it bears repeating. Every year, no fewer than 40 million futures and forwards are traded. Options, meanwhile, amount to only 5 million. It goes without saying that aluminum serves as a support for all Asian markets.
History of aluminum prices
The rise in aluminum prices was brought to a halt by the automotive sector crisis in 2008. Since then, the ceiling reached by aluminum prices in 2006, which amounted to 3000 dollars per tonne, has never been reached again. This crisis led to a decline in world production. As demand fell, production and stocks became excessive.
It was the first time in 10 (1999 to 2009) years that the price suffered a drop of 65%. Because the cost of aluminum production was very high, many industries and foundries had to close their doors. It must be noted that the price has never resumed an upward trajectory since that year.
Everything you need to know about the aluminum market
Europe and the United States constitute the main aluminum markets; however, it is China that is the main importer. Demand from this country continues to rise.
Note that aluminum manufacture is very energy-intensive. It has been observed that a quarter of production costs are related to energy consumption. This is one of the reasons that justifies its strong dependence on the oil price.
There is also the fact that it takes about 4 tonnes of bauxite to produce 2 tonnes of alumina. It is only with these 2 tonnes of alumina that one can extract one (1) tonne of aluminum. If you want to invest in aluminum, you need to know everything about the LME, the COMEX and the TOCOM. Note that aluminum is the third most abundant element in the world, just after silicon and oxygen.