Industry: Chemicals and Materials
Published Date: November-2024
Format: PPT*, PDF, EXCEL
Delivery Timelines: Contact Sales
Number of Pages: 180
Report ID: PMRREP34892
The global alumina market is anticipated to reach a value of US$ 106 Bn by 2031 from approximately US$ 85 Bn in 2024. With a steady CAGR of 3% from 2024 to 2031, the market is on track for a remarkable 1.5x revenue expansion in just seven years.
Rising demand for high performance and safety in automotive is anticipated to create a surging need for advanced aluminum materials. Iron and steel vehicle components are set to be replaced with aluminum parts in the next ten years, thereby bolstering alumina demand. Several countries are hence focusing on extending their production capacities to keep up with the growing demand.
Global alumina production exceeded 145 million tons in 2023 with China dominating the market by accounting for over 50% of this output. China's alumina production has been consistently rising driven by the launch of new projects and the reactivation of idle capacities. As one of the leading importers of bauxite, the country has significantly increased its imports in recent years, particularly from Guinea, totaling 107 million tons in 2021.
Australia ranks as the second-largest alumina producer, generating approximately 21 million tons. The country has firmly maintained its status as a top exporter, operating six refineries primarily focused on smelter-grade alumina.
In Latin America, the pure alumina production landscape places Brazil at the forefront, having produced over 10 million tons in 2022. Jamaica stands out as another vital producer in the region, boasting rich bauxite reserves and ranking among the top five globally. Jamaica is poised to significantly increase its earnings from the bauxite and alumina industries in 2023.
Key Market Highlights
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Market Attributes |
Key Insights |
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Alumina Market Size (2024E) |
US$ 85 Bn |
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Projected Market Value (2031F) |
US$ 106 Bn |
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Global Market Growth Rate (CAGR 2024 to 2031) |
3% |
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Historical Market Growth Rate (CAGR 2019 to 2023) |
2.7% |
In Europe, Russia is projected to remain at the forefront in terms of alumina production. It is estimated to hold an alumina market share of 40% in 2024. The country plays a significant role as a key producer of alumina and aluminum in Europe, contributing over 35% of alumina production in the region in 2023.
Ongoing geopolitical tensions with Ukraine have led to fluctuations in alumina prices, particularly in Europe. This conflict has impacted powdered alumina production capabilities in Ukraine. With Australia imposing a ban on bauxite and alumina exports to Russia, the supply chain for these raw materials has faced challenges.
On a positive note, Russia has increased alumina imports from China, helping to alleviate some of the gaps in its supply. Although sanctions have shifted global alumina trade dynamics, there is an opportunity for market adjustments.
While high energy prices have led to a few disruptions in aluminum smelters across Europe, this situation has also created an impetus for innovation and investment in sustainable energy. By navigating these challenges, regional market players are projected to work toward achieving their green transition goals more effectively.
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Category |
CAGR through 2031 |
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Grade- Smelter Grade Alumina |
2.8% |
The global alumina market is distinctly classified into two primary categories namely, Smelter Grade Alumina (SGA) and Chemical Grade Alumina (CGA). Out of these, smelter grade alumina is considered the dominant segment as it is exclusively produced through the calcination of aluminum hydroxide in refineries.
In 2024, SGA constituted around 90% of the total alumina demand worldwide and is set to experience an average CAGR of 2.8% from 2024 to 2031. It is projected to be essential for aluminum production, which is then crafted into various products, including flat, extruded, and forged forms.
Industries, such as automotive, aerospace, packaging, and consumer goods are likely to seek high-quality aluminum to manufacture critical building materials. The global aluminum market, valued at approximately US$ 304.7 Bn in 2023, is poised to reach an impressive US$ 458.5 Bn by 2031. This steady growth is estimated to positively influence sales of SGA.
Rising aluminum recycling is another important factor pushing demand for SGA. Recycling is anticipated to be an ideal alternative for companies looking to cut expenses and achieve emissions goals. The process consumes a lot less energy than generating raw aluminum. Companies are hence anticipated to obtain aluminum from recycled scrap metal rather than from newly mined bauxite and alumina as environmental restrictions tighten.
Aluminum oxide, commonly known as alumina, serves as the essential raw material for aluminum production. It is anticipated to play a significant role in the transition to a low-carbon economy. As one of the most prevalent commodity metals in modern society, alumina has experienced substantial growth in consumption, driven by rapid expansion of the primary aluminum industry over recent decades.
Due to its unique combination of properties, alumina is utilized across a diverse range of applications. These include competitive sectors such as refractories, ceramics, Aluminum Trihydrate (ATH) flame retardants, abrasives, and zeolites, alongside high-value specialty products like high-purity and activated alumina.
The substantial amount of bauxite needed for production is the primary cause of the rising demand for alumina. About 4 to 5 tons of bauxite produce 1.95 tons of alumina and approximately 1 ton of aluminum. The requirement for alumina is expected to surge as aluminum use rises in construction, automotive, and aerospace sectors, further taxing supply networks and refining facilities.
Historical Growth and Course Ahead
In the historical period between 2019 and 2023, the alumina industry witnessed a CAGR of 2.7%. The COVID-19 pandemic significantly impacted on the aluminum supply chain, primarily due to factory shutdowns, port closures, and a shortage of container ships.
Global lockdowns aimed at controlling the pandemic further resulted in considerable overland transportation bottlenecks. In 2020, alumina prices fell by 15%, reaching a near four-year low. It unfortunately led to approximately 25% of global aluminum smelters facing losses or requiring to cut or halt production.
High-purity alumina prices, however, began to recover in 2021 returning to pre-pandemic levels, despite ongoing lockdowns and movement restrictions in some alumina-producing countries. By 2022, high energy costs and persistent supply disruptions in Australia kept alumina prices elevated.
In 2023, the average alumina price rose to US$ 450 per ton marking a sharp increase of about 35% compared to 2020. Alumina prices are expected to remain high, driven by continuing energy cost concerns across the value chain. This situation presents an opportunity for stakeholders to explore solutions that can enhance resilience and stability in the market.
Reliance on New Suppliers Rises as Companies Seek Uninterrupted Supply
The alumina market has been impacted by trade and tariff concerns between the U.S. and China. Alumina and other key commodities are among the exports from China that could be restricted or subject to tariffs. It may further decline international supply networks and increase price volatility. To stabilize alumina prices amid these geopolitical tensions, several leading companies are adopting novel strategies worldwide.
To lower their reliance on politically unstable areas, several manufacturers are diversifying their supply chains or looking for new suppliers. For instance, nations are acquiring supplies from other regions to reduce the possibility of abrupt price spikes in the aftermath of geopolitical disturbances impacting the energy and aluminum markets. For instance,
By taking similar actions, the risk of geopolitical tensions can be reduced and supply stability can be ensured. Such contracts are set to help lower volatility in the event of market disruptions by enabling manufacturers to secure agreements.
Guinea’s Bauxite Suspension to Shake up Alumina and Aluminum Production
Due to the suspension of Guinea's bauxite exports, a key source for China, the global alumina market growth has been affected, and spot prices have reached all-time highs. Due to these supply delays and high demand from aluminum producers, alumina prices in China spiked to all-time highs on October 15. For example,
China relies heavily on bauxite imports from Guinea for alumina production, with around 70% of its needs sourced from there. This reliance has grown due to significant investment by China in Guinea's output over the past decade. China to account for 60% market share in 2024.
Guinea Alumina Corporation (GAC) exports, for instance, were stopped by customs officials, which made supply problems worse. China's limited supply of bauxite and unfavorable import conditions, such as rising alumina costs in Australia are putting pressure on aluminum producers. Production is likely to continue as there are not many prospects for arbitrage. The profit margins of China-based aluminum smelters are anticipated to remain strong in future.
Spiking Alumina Prices May Hamper Profit Margins and Stock Performance
The current state of the metal market is unstable due to the impact of increased alumina prices on manufacturing costs and revenue. A number of factors such as interruptions in supply chains and rising aluminum demand across multiple industries, are contributing to this price spike. As companies struggle with these shifts, the effect on metal inventories becomes more noticeable.
In October 2024, for instance, leading firms like MMP Industries, Vedanta, Hindalco Industries, Century Extrusions, National Aluminum Company (NALCO), Arfin India, and Maan Aluminum, all headquartered in India, announced that high alumina prices can take a toll on their aluminum smelters. These players predict a decline in profits, especially for those who do not possess in-house smelters.
Investments in Aluminum Value Chain across Asia Pacific to Create Growth Avenues
In recent years, investments in the aluminum value chain have surged significantly. Southeast Asia, for instance, is set to gain high profits from investments in aluminum and integrated sectors. With China actively pursuing overseas alumina projects to tap into bauxite deposits, the region is poised to be a key beneficiary. Indonesia, on the other hand, implemented export bans to protect its resources in the second week of June 2023, halting bauxite outflows.
The country is also making significant strides in bauxite processing, an essential raw material for aluminum smelters. It is on track to become the fastest-growing alumina market globally in the coming years, emerging as a prime location for China to establish alumina projects. Notably, Shandong Nanshan has ambitious plans to extend its new alumina plant in Indonesia into a massive US$ 6 Bn aluminum smelting complex, fostering market growth.
Companies to Adjust Production Strategies to Maintain Supply Commitments
Several key alumina producers are anticipated to focus on adjusting their manufacturing strategies to fight the challenges of fluctuating demand and geopolitical unrest. Rusal, for example, had production and export limitations at a number of its sites after Western sanctions were placed on Russia. To offset the effect on exports, the company enhanced alumina production from local sources, including its refinery in Tayshet.
Alcoa, on the other hand, reduced manufacturing activities at its Kwinana refinery in Australia in June 2024 to address operational issues. It maintained delivery volumes through strategic changes and increased external sourcing to meet demand in spite of the reductions. These strategy changes are expected to help companies maintain their global supply commitments.
Several leading companies, including Aluminum Corporation of China Limited (CHALCO), China Hongqiao Group Ltd., Shandong Xinfa Group, Alcoa, Rio Tinto Alcan, and Rusal have successfully integrated their alumina businesses. These manufacturers are actively pursuing capacity expansion and addressing bottlenecks in their facilities, which positively impacts their business performance.
There is also a strong commitment to prioritize sustainable technological innovations aimed at reducing greenhouse gas emissions and fostering a circular economy. This transformative approach is expected to encompass the entire value chain, from bauxite and alumina to finished aluminum products. For instance,
Recent Industry Developments
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Attributes |
Details |
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Forecast Period |
2024 to 2031 |
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Historical Data Available for |
2019 to 2023 |
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Market Analysis |
US$ Billion for Value |
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Key Region Covered |
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Key Market Segments Covered |
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Key Companies Profiled |
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Report Coverage |
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Customization & Pricing |
Available upon request |
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It is projected to rise from US$ 85 Bn in 2024 to US$ 106 Bn in 2031.
Australia is considered the world's largest exporter of alumina, whereas China is the largest producer.
It is anticipated to exhibit a CAGR of 3% from 2024 to 2031.
NALCO located in Odisha is considered the largest alumina plant in India.
Gem, electronics, protective and military equipment, and construction materials are a few industries.
