Global aluminium demand to soar 40% by 2030, driven by economic recovery, industrial growth

• Production increase of 33 mnt expected by decade-end
  
  
• China's recall of export tax refund on semis to hit supply
  
  

Marubeni Light Metals Department announced its forecast for the aluminum ingots market in 2025. According to its outlook, a supply shortage of 412,000 tonnes (t) was anticipated due to sluggish supply growth, which struggled to keep up with the rising demand driven by economic recoveries in major countries and growing industrialisation in emerging markets.

According to the International Aluminium Institute (IAI), global demand for aluminum is set to surge significantly in the coming years, driven by a combination of economic recoveries in major countries and increasing industrialisation in emerging markets. The forecast showed a 40% increase in global aluminum demand by 2030, which would require a production increase of 33.3 million tonnes (mnt), from 86.2 mnt in 2020 to 119.5 mnt by the end of the decade. Key sectors such as transportation, electricity, packaging, and construction were expected to experience the largest growth in demand, with consumers increasingly focusing on sustainability, further boosting the need for aluminum.

However, the global aluminum market faces a looming supply shortage, with a forecasted deficit of 412,000 t by 2025 due to sluggish supply growth. This shortfall was linked to limited production growth despite rising demand. China's aluminum production, the world's largest, was reaching its capacity limit due to strict environmental regulations, with production expected to peak at a record high of 42 mnt in 2024. However, future output growth was expected to be constrained, making it difficult to meet the growing demand.

Outside of China, aluminum smelters were grappling with prolonged production cuts and delays in expansion plans, primarily due to rising alumina prices and higher energy costs. As a result, supply growth was expected to lag behind demand, exacerbating the global aluminum shortage.

One of the key developments impacting supply and demand was China's decision to suspend export tax refunds on semi-finished aluminum products starting in June 2024. This policy change was set to reduce China's price competitiveness in global markets, as aluminum semi-finished products had previously benefited from a 13% VAT refund at the time of export. The suspension was expected to lead to higher production costs, which could shift demand for aluminum ingots to other producers.

Additionally, aluminum packaging was expected to grow from 7.2 mnt in 2020 to 10.5 mnt by 2030, fuelled by the rising popularity of canned beverages in North America, Europe, and China. This growth was also driven by a surge in demand for eco-friendly packaging and the introduction of new products.

Note: This article has been written in accordance with a content exchange agreement between Japan Metal Daily Global and BigMint.