Roskill Information Services: China dominates the global aluminium industry

China dominates the global aluminium industry accounting for one third of both world production and world consumption of primary aluminium. While China is self sufficient in aluminium metal and approaching self sufficiency in alumina, dependence on imported bauxite remains high despite rising output. However, power supply issues and high costs of production could result in declining production in the longer term and the possibility that China will become a net importer of primary aluminium.
Russia, Canada, the USA, Australia, Brazil, Norway and India are the principal producing countries after China. These countries together account for about three quarters of world output of primary aluminium.

Although some 200 smelters, half of which are in China, produce primary aluminium, 14 companies operating about 100 plants controlled over 60% of output in 2007. Consolidation of the Russian companies Rusal and Sual with Glencore in 2006 into UC Rusal, and the acquisition of Alcan by Rio Tinto in 2007 resulted in two aluminium producers comparable in size to Alcoa.

World aluminium output rose by between 0.15 and 12.2%py between 1994 and 2008, averaging 5%py. Growth averaged around 7%py after 2001 mainly due to explosive expansion in production in China. Output began to contract in the second half of 2008 and this accelerated in 2009, meaning that world aluminium production is likely to decline for the first time in fifteen years and by as much as 5%.

In 2009, almost fifty aluminium smelter projects, with a total capacity of 20Mtpy, were at various stages of development, but only 10, with a total capacity of 2.8Mtpy, were already under construction. For most of these projects, no decision with regard to timing had been finalised and the timetables of the others are under review. At the same time, most of the major producers are idling high cost and inefficient capacity in response to low demand and prices.

The earliest major project to come on line will probably be Qatalum in Qatar, which is likely to be a very low cost producer. During 2008, a new 300ktpy smelter started operations in Oman and UC Rusal restarted output in Nigeria.

Reported production (which excludes as much as 2Mt in China) of refined secondary aluminium and aluminium alloy amounted to about 8.8Mtpy in 2007, mainly in the USA, Japan, Germany and Italy. A further 3 to 3.5Mtpy of secondary aluminium is recovered directly into end-uses. US-based Aleris International, owned by Texas Pacific and, formed in 2004 by the merger of IMCO Recycling and Commonwealth Industries, is probably the world’s largest aluminium recycling company. Novelis, which acquired Alcan’s secondary facilities in the USA, and Hydro Aluminium North America are major aluminium recyclers. Used beverage cans are the largest source of scrap and raw material for secondary aluminium ingot.

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