We all know aluminum is cheap.
But the aluminum market is one of the fastest-growing in the world, and the growing number of companies making aluminum parts is a potential game changer.
Business Insider spoke with industry executives about how they see the aluminum markets shifting from manufacturing to processing and how they expect the global aluminum market to grow to $10.3 trillion in 2020, an increase of $7.2 trillion over 2021.1.
Aluminum manufacturing in the US and Mexico is the fastest growing.2.
Manufacturing will drive up the demand for aluminum parts globally, according to a McKinsey Global Institute study.3.
Aluminum will grow to become the most valuable commodity in the metals market by 2020.4.
The aluminum market will grow from $1.7 trillion in 2021 to $7 trillion by 2020, with a potential $10 trillion market share by 2020Source: McKinsey, 2017The global aluminum industry will continue to be driven by the domestic market, and will grow as domestic demand continues to grow.
For example, China, a major aluminum producer, plans to double the number of aluminum plants over the next five years.
In addition, the US has already ramped up production capacity for aluminum by more than 80% and is looking to ramp up production of aluminum parts as well.5.
In 2020, the global manufacturing industry will account for $1 trillion of global trade, up from $917 billion in 2021, according an MIT study.6.
The U.S. is poised to grow the aluminum manufacturing industry to account for 30% of global aluminum trade by 2020 and by 2020 to account with a significant share of global imports, according a McKinley Global Institute report.7.
By 2020, domestic aluminum demand will account with an estimated $8.5 trillion of total global aluminum imports.8.
By 2021, the U. S. will account to a significant portion of global total aluminum imports of $2.4 trillion, up $2 trillion from 2021, a McKinseys Global Institute analysis shows.
Source: US Department of Energy, 2017A significant shift away from traditional metal processing is expected in the coming years, according the McKinsey study.
“It will be a much smaller, less specialized market, where there are fewer people, less equipment, fewer people with the same skills,” said Michael Cusum, director of the MIT Center for Sustainable Materials Innovation.
Cusums co-author of the McKinseys study, said that, as demand grows, more and more aluminum will be processed in factories around the world.
“There will be more people working on it,” he said.
“And we’ll have more machines and more equipment, which means we’ll be able to process more aluminum in a shorter time.”
The McKinsey report also said that there will be increased manufacturing capacity for aluminium in the future, but it’s not clear if that’s the case.
“We’ll see an increasing share of aluminum made in factories, not just in the U, but globally,” said Cusam.
“In the next couple of years, we expect that’s going to be more and bigger than it is today.”
The McKinsey Institute found that the number and type of aluminum products made in the United States will increase over the course of the next decade.
The report found that aluminum products will increase from 0.4% of total aluminum products in 2021 (the current year) to 1.3% in 2020.
In the next two years, the number is projected to jump to 2.7% of aluminum product volume and to 2% of product volume in 2021.
Cusum added that, while aluminum prices are increasing, the growth of the domestic aluminum market could have a negative impact on the global supply of aluminum.
“As the price of aluminum rises, more aluminum is going to go to China and India, which are going to get more aluminum, and more of it will be manufactured in Asia,” he explained.
“The problem is, China and its neighbors are the world’s largest exporters of aluminum, so there’s a huge opportunity for that aluminum to become a huge global supply, especially in the developing world.”