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AL AL · USD/Mt

Aluminium

3475.5
USD/Mt
▼ -50.400 (-1.43%)

About Aluminium

Aluminium is one of the few metals that is widely used in our everyday lives. 

It is counted among the most abundant elements found in the Earth’s crust and ranks number three in the list after silicon and iron. Properties such as being lightweight, and durability make it one of the key engineering materials of the modern civilisation.

Be it automobiles, trains, aircraft, kitchen wares, mobile phones or other home appliances - all contain some amount of aluminium. And who can forget about the thin aluminium foils, which is used to wrap and pack food items to keep them fresh.

Besides, aluminium as a metal is easy to recycle. The recycling of aluminium consumes very less energy, nearly 5% of what is consumed originally during the smelting and processing of the primary aluminium. Interestingly, a piece of aluminium weighs nearly one-third of steel of the same dimensions.

Bauxite is the most important ore for aluminium extraction. The ore is mined and processed to recover alumina, which after smelting produces aluminium. It is estimated that around 2-3 tonnes of bauxite are required to produce one tonne of alumina.

An energy-intensive operation, aluminium production requires 15MWh during the electrolytic reduction process to produce one tonne of aluminium from alumina.

Global Alumina Market

Australia continues to be the world’s largest producer of bauxite and a leading exporter of alumina, with the majority of its alumina output exported to global markets.

Globally, bauxite production is concentrated among a few key players, with Australia, Guinea, and Brazil forming the backbone of global supply, while countries such as China, India, and Indonesia also contribute significantly. China dominates global aluminium consumption and production, accounting for over 55–60% of global aluminium output, driven by demand from construction, electric vehicles, and infrastructure sectors.

Due to limited domestic reserves and declining ore quality, China remains heavily dependent on imports of bauxite and alumina, sourcing large volumes from Guinea and Australia. Other major aluminium-consuming regions include the United States, Japan, and Europe, which have relatively limited domestic bauxite resources and therefore rely on imports to sustain their refining and smelting industries.

Frequently Asked Questions

What are the factors that make aluminium a highly sought after commodity?

From beer and soft drink cans to aeroplane bodies and electrical wiring, aluminium has numerous industrial applications. The properties that make aluminium so important for the commodity market are:

  1. Aluminium does not rust; it can last longer than iron even in high moisture zone.
  2. Weighs nearly one-third of steel.
  3. It can be easily recycled. Nearly 75% of all aluminium produced originally is still in circulation.
  4. Aluminium is the third most abundant mineral in the earth’s crust.
  5. It is highly ductile and has high heat resistance.
Which exchanges are available for aluminium trading?

Aluminium future contracts are traded on major commodity exchanges, including the London Metal Exchange (LME), New York’s COMEX and the Shanghai Future Exchange. Aluminium future’s contract size is of usually five tonnes.

LME is the world’s largest exchange for trading aluminium future contracts. In terms of trading, aluminium is the world’s largest commodity on the LME and accounts for nearly one-third of all contracts of the exchange.

The exchange acts as a platform for over 700 distinct specialised metal warehouses in 14 different countries and trades more than 100 aluminium brands from top producers.

What is the value chain of aluminium?

The journey of aluminium begins with the mining of bauxite. Bauxite is the commercial ore for aluminium and normally contains 15%-25% of aluminium.

Contemporary aluminium production involves a hydrometallurgical refining method for producing alumina, followed by the electrolysis of this mineral. The method or process was created in 1886 and is still in use. The Bayer method is used by around 90% of alumina refineries worldwide to refine bauxite ore.

Aluminium is produced by refining alumina during the smelting process. In alumina, the aluminium atom is linked to oxygen. Electrolysis is used to break these bonds.