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Aluminium’s moment: How the lightweight metal is powering the next industrial cycle

EDITED BY : 3MINS READ

With a resurgence of demand for metals in the global markets, both precious and industrial metals are drawing investment. While gold has approached record highs near USD 2,700 per ounce, silver has edged close to an all-time high, and platinum prices have surged by 80 per cent so far this year.

Image of primary aluminium casting

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This renewed growth surrounding metals suggests a broader shift in investor sentiment towards commodities, since inflationary pressures and industrial demand remain strong.           

Aluminium steps out of copper’s shadow

So far, copper has a dominating market due to its key role in electrification and renewable energy infrastructure. Simultaneously, aluminium has been a second priority but praised for its lightweight, corrosion-resistant, and highly recyclable nature. 

Although bauxite, the ore from which aluminium is extracted, is abundant, refining it requires massive electricity inputs, making energy costs a key bottleneck. With an increasing rate of power outage coupled with environmental constraints, supply may struggle to keep pace with the growing demand.

However, the trends suggest that aluminium could soon follow in copper’s footsteps as the next major growth metal due to its growing importance in the domain of electric vehicles, clean energy and modern manufacturing.   

According to the Citi forecast, the aluminium surplus will drastically shrink in 2026, turning it into a deficit of around 1.4 million tonnes. If not addressed on time, it will create a persistent deficit till 2030.   

Energy costs emerge as aluminium’s biggest challenge

Electricity prices are now a critical bottleneck. Alcoa has revealed that smelting operations can only survive and remain economically viable when power costs are not more than USD 30 per megawatt-hour (MWh). However, in reality, the competition from tech giants shows that they are willing to pay more than USD 100 per MWh for power. As a result, the idea of affordable energy remains elusive.

In China, which accounts for roughly 60 to 70 per cent of global aluminium production, Beijing’s self-imposed 45 million-tonne annual capacity cap has curtailed new expansion. Analysts at Citi project that the global aluminium surplus will shrink sharply through 2026, tipping into a 1.4 million-tonne deficit, about 2 per cent of global primary consumption, by 2027. Wood Mackenzie expects this shortage to persist for at least five years from 2028.

Read More: Canada eases tariffs on select US and chinese aluminium imports

Rising demand across key sectors

  • EVs: Lighter and stronger, aluminium helps extend range. Electric cars use about 150 lbs more aluminium than conventional ones. The Ford F-150 set the trend with its aluminium body.
  • Clean Energy: Second only to steel in solar use and now replacing copper in power lines as it’s cheaper and lighter.
  • Aerospace & Packaging: Favoured for its strength, low weight, and recyclability.
  • Data Centres: Used in cooling systems and frames as AI and cloud infrastructure expand.

Aluminium is all set to shine

With the growth of demand for sustainable materials and the massive global shift toward decarbonisation, versatile aluminium has positioned itself as the key competitor in the upcoming phase of industrial expansion.

From automotive production and aerospace engineering to wind and solar infrastructure, the demand for aluminium is sharply rising over the coming years. No doubt, the market scenario suggests that it is aluminium’s moment to shine in the global market after a long time.  

Read More: Aluminium prices fall amid US-China trade uncertainty

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EDITED BY : 3MINS READ

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