Global production for aluminum increased by 3.2% in Q2 2022 as compared to Q1 2022 and 1.1% as compared to Q2 2021. China is the world's largest producer of aluminum; the global production growth was mainly due to an increased output in China. Aluminum production grew due to the domestic aluminum supply in June, which continued to increase. The production resumption and the new capacity in Guangxi, Gansu, Yunnan, and other regions totaled around 450,000 mt, contributing to a major increase. Aluminum prices decreased by more than 6% in Q2 2022 as compared to Q1 2022.The price decline was mainly due to poor global economic growth and a rising US dollar on the back of monetary tightening cycles seen across the globe.
In Q3 2022, the global production for aluminum is expected to increase by 3.6% from Q2 2022. The demand for aluminum is bound to increase because of the high demand for recyclable and sustainable materials in various end use industries, such as electrical and industrial production. Aluminum prices are forecast to decrease by 4.1% in Q3 2022. The figure below depicts the change in demand and price of aluminum over the past five quarters. The data also provides forecast for Q3 of 2022 as below.
Source: World Aluminum Institute, Lucintel
Figure: Global Quarterly Aluminum Production and Price Trends
In North America, aluminum production increased by 1.6% in Q2 2022 as compared to Q1 2022. An increase in demand for aluminum was due to the growth in demand from end use industries, like automotive. Automotive and construction industry account for ~35% of the US aluminum consumption. In Q3 2022, the North American aluminum demand is expected to increase due to increased demand for recyclable and sustainable materials and robust trade enforcement.
In Europe, aluminum production declined slightly by 0.2% in Q2 2022, when compared to Q1 2022; however, it is expected to move in an upward trend in Q3 2022. Aluminum production decreased in Q2 2022 because Europe’s largest aluminum smelter reduced production due to soaring power prices. The price of power in Europe has increased significantly because of the Russia-Ukraine war. Aluminum demand is expected to increase further due to increased demand from the electronics and packaging industries.
In Asia, aluminum production increased by 4.7% in Q2 2022 as compared to Q1 2022, and it is expected to increase further in Q3 2022 when compared to Q2 2022. The production increased in Q2 2022 due to the production resumption and the new capacity contributing to the major increase. Prices also decreased considerably for aluminum and associated products in Q2 2022 from Q1 2022, and it is expected to decrease further due to decrease in raw material price. In Asia the demand for aluminum is expected to increase in the next quarter due to China's relaxed electricity controls over energy-intensive sectors and ease in COVID-19 restriction.
In ROW, aluminum production increased slightly by 0.8% in Q2 2022 as compared to Q1 2022, and it is expected to increase in Q3 2022. The aluminum demand increased in ROW due to increased demand from end users, like automotive. Aluminum demand is expected to increase in this region in Q3 2022 due to the recovery in market conditions and aluminum consumptions.
The price and demand analysis on above is published monthly for various regions. Lucintel analysts collect supply, demand and price data from various suppliers and consumers on a monthly basis and also analyzes news on supply and demand issues, production, and price trends. This allows Lucintel to publish unbiased assessments on price and demand movements to help you make confident business decisions on your negotiation or business issues.
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