The global aluminum industry currently presents a fairly healthy picture after years of tough times, but the longer-term scenario appears to be murkier, a top aluminium executive has said.

Alcoa chairman and chief executive Alain Belda said in Bahrain recently that growth had resumed with consumption up seven per cent in 2003 following an improved business climate in the developed world and strong demand in many emerging markets including China.
“After several years of weak consumption, demand and supply are roughly balanced today, and prices have resumed as a result,” said Belda.
“The alumina market is also tight, and most of these positive market dynamics should continue for the remainder of this year.”
The Alcoa chief, delivering the keynote address at Arabal 2004, said new applications in transportation, packaging and the construction markets would continue to drive growth in the near term. As emerging markets like China and India began to match the aluminium intensity of the developed world, that growth should be reinforced.
But he warned that throughout a period of rising consumption it was clear that real prices for aluminium were falling steadily.
Several factors were critical towards maintaining the momentum in the industry. One was the vitality of the economic recovery. China was likely to continue to grow rapidly in the near future, but the longevity of the economic resurgence in the Organisation for Economic Co-operation and Development (OECD) countries was more uncertain. Within the industry growth would depend on how quickly new applications for the metal took hold, how quickly emerging markets adopted aluminium and how quickly global OEMs substituted aluminium for steel and other materials.
The rate of growth would also depend on how well the industry focused on creating value throughout the entire chain from mining, refining and smelting to fabrication.
Alcoa is the world’s leading aluminium company with capacity of nearly 14 million tonnes per year (tpy) and revenues of $21.5 billion. Operations are conducted through 27 smelters where the annual capacity is more than four million tpy of primary aluminium.
Primary aluminium is however only 24 per cent of Alcoa’s customer revenues, the other three quarters coming from value-added fabricated products for the transportation, building and construction, packaging and consumer, and other industries. In all those segments Alcoa is the number one aluminium products supplier and its packaging business is among the world’s top 10.
Some 600 prominent figures from aluminium-related companies worldwide attended the conference. The exhibition attracted 30 specialised aluminium companies. Interactive electronic stations have been installed to transmit information about products and strategies.
Another speaker, Richard B Evans, executive vice-president at Alcan, said aluminium vied with steel, plastics and other materials not only for the market share but also for the ‘mind share’ as the sustainable metal of choice in key sectors such as auto manufacturing.
“The good news is we have several external forces working in our favour,” he said, stressing that an important one was that it was the world’s most recyclable material.
With regard to the auto industry, as aluminium theoretically delivered real value in terms of customer solutions it would continue to replace steel in motor vehicles.
Evans, who is also a director of the International Aluminium Institute (IAI) said the organisation had promoted a few specific messages, namely that aluminium was a sustainable material, an “energy” bank from which the original significant energy input could be reused again and again and also that recycling aluminium required only five per cent of the energy that primary aluminium production required while producing only five per cent of the carbon dioxide emissions.
In other messages, IAI underlined that lightweighting of motor vehicles with aluminium could reduce fuel consumption and emissions of pollutants and greenhouse gases (GHG); every kilo of aluminium replacing traditional heavier materials in a motor vehicle could save the equivalent of 20 kg of carbon monoxide over the vehicle’s life; Perfluorocarbons (PFC) emissions overall fell 56 per cent between 1990 and 2001, while global primary aluminium production rose 25 per cent over the same period.
“This is one of the few examples from any industry in which GHG emissions have been reduced even as total production increased,” Evans said.
IAI has also been stressing that the aluminium industry had reduced energy use by 37 per cent since 1950; the total area of former bauxite mine land rehabilitated annually continued to rise and in 2002, 97 per cent of reporting mines had formal rehabilitation procedures, and health and safety standards in aluminium production workplaces and communities continued to rise.