Optimism Sets the Tone for Medium to Long Term Aluminum Demand

Optimism sets the tone for aluminum demand during the recovery phase of the coronavirus pandemic, as governments invest in infrastructure, construction, and the automotive sector in order to help the economic recovery of their countries.  Although Miles Prosser, Secretary-General of International Aluminum Institute, sees a small mismatch between the present production of aluminum and demand, he declares that this will be short-lived and we will see “demand growth continuing very strongly for 10-12 years and we will need a lot more production than what we have today” (Bloxsome, World Aluminum, June 23.)  Prosser adds, “Covid-19 can, and should be, a pivotal moment for the aluminum industry….with an emphasis on responsibly sourced, lower carbon aluminum, [and]lower environmental impact.”  As a part of this green movement, Eccomelt LLC  looks forward to sharing with you the latest study on the exact numerical percentage of the carbon footprint impact of eccomelt356.2, calculated in a study that will soon be published by McGill University.  Please stay tuned!

Aside from the short term mismatch between global primary aluminum production and demand which existed even before the coronavirus pandemic began, the aluminum market growth rates can be expected to average 2-4% per year due to population growth and the accompanying need for more construction, cars, and packaging, as well as a continued increase in aluminum intensity in sectors like transportation and substitution of other metals.  According to Diana Kinch of Commodity Metals, the demand that exists of around 90 million mt today will become approximately 150 million mt by 2040, including recycled aluminum that now accounts for around 35% of total demand and should continue rising.

Augmenting this predicted growth in demand for aluminum is the fact that the Covid-19 pandemic has not interrupted the rapid-paced transition to electric vehicles, and the demand for EVs is continuing unabated.  As reported in Al Circle, aluminum is overtaking steel as the material of choice for electric vehicles.  Although steel is cheaper, aluminum is lighter, and higher performing.  It is more protective of its passengers in the event of a crash, and of course creates a lighter weight vehicle than steel, which leaves a lower carbon footprint.   According to the IEA, despite the pandemic, electric car sales could reach a record share of the overall car market this year.  One might ask what is causing the sustained interest in electric vehicles considering the fact that, initially, the automotive industry, in general, took a hit in the first few months of the pandemic?    According to Martin Hartlieb, metallurgical expert, and CEO of Viami International, there are a few factors involved.  For one, governments are providing scrap premium incentives for old cars if you buy an EV. Second, governments are investing in charging infrastructure as a stimulus for the economy. In addition, while some say that Covid-19 is increasing environmental awareness in people, others claim that EVs make people feel more independent since the vehicles are charged at home and don’t require a trip to the gas station; as a result of these viewpoints, consumer demand is significant. The aforementioned factors, when viewed together, reveal a positive outlook for aluminum in the medium to long term.

Eccomelt356.2 | Direct Substitute for A356.2 Ingot, Sow & T-bar
Alongside Alcan R&D, Eccomelt LLC has developed a patented innovative process that produces a specification alloy from aluminum wheels at a lower cost than traditional methods, and that meets that EPA definition of CLEAN CHARGE.
Eccomelt LLC ships products to foundries within North America including the United States, Canada, and Mexico, and worldwide, such as France, Ireland, Italy, Serbia, and Spain. Our product is the material of choice for many consumers because it is sustainable and chemically pure with the lowest carbon footprint of any aluminum alloy. Its shredded form has achieved higher melting rates than Ingot, Sow, or T-Bar.
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