LED lighting demand to drive global HPA market growth during 2016-20

According to the latest Research and Markets publication, the global high-purity alumina market is slated to grow at a CAGR of 27.11 per cent during the period 2016-2020. The growing adoption of LED lighting systems and displays has been identified as a key growth driver for the segment.

In 2015, single-crystal sapphire which finds wide-scale use in LED manufacturing alone accounted for 55.09 per cent of high-purity alumina production. LED lighting technology ensures energy efficiency, hence- sustainability, durability and safety- properties which has been fueling its use in both housing and commercial applications.

LEDs have gained in popularity over the last few years by virtue of advantages that far outcast incandescent lighting benefits. Resultantly, market share of incandescent lighting has been shrinking fast. In 2015, the global LED lighting market for industrial applications stood at $2.34 billion and is expected to reach $6.26 billion by 2020, growing at a CAGR of 21.75 per cent.

The Research and Markets report states that the global high purity alumina market will be faced by the challenge of rising production cost during the forecast period. Power prices, which account for a significant portion of the aluminium production cost, has been rising steeply, driven by growing demand for energy. As a result, smelters, unable to cope with the rising raw material cost have been closing down. This mass closure could create a shrinkage in demand for alumina within the aluminium value chain.

Nevertheless, given the expanding applications of aluminium in the end user industries, the smelters would find a way out to sustain in the tough market scenario and stay profitable in the long run.

Rising energy tariffs also nibble into the vendors' profit margins- a challenge alumina industry players need to cope with in a strategic manner over the next five years.

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