Global production of aluminum increased by 3.5% in Q3 2022 as compared to Q3 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 ramping up of output after the power restrictions were relaxed. Output from regions, like Guizhou and Inner Mongolia, has risen with newly added capacity, which is enough to more than offset production. Aluminum prices decreased by more than 7% in Q3 2022 as compared to Q3 2021, mainly because China dashed hopes of an easing in COVID-19 restrictions that have dampened economic growth.
In Q4 2022, the global production for aluminum is expected to increase by 8.2% as compared to Q4 2021. The demand for aluminum is bound to increase because of the China’s loosening power restrictions that allowed some regions to ramp up output and as new smelters started operation. Another reason is the increase in demand from various end use industries, such as automotive, electrical, and industrial. Aluminum prices are forecast to decrease by 16.3% in Q4 2022 as compared to Q4 2021. The figure below depicts the change in demand and price of aluminum over the past five quarters. The data also provides forecast for Q4 of 2022 as shown below.
Source: World Aluminum Institute, Lucintel
Figure: Changes in the Global Aluminum Production and Price Trends
In North America, aluminum production decreased by 4.2% in Q3 2022 as compared to Q3 2021. The decrease in demand for aluminum was due to a decline in demand from end use industries, such as automotive and construction. Automotive and construction industries account for ~35% of the US aluminum consumption. In Q4 2022, the demand for aluminum in North America is expected to increase due to an increase demand from the automotive industry.
In Europe, aluminum production decreased by 5.3% in Q3 2022, when compared to Q3 2021; however, it is expected to move in an upward trend in Q4 2022. Aluminum production decreased in Q3 2022 due to the decreased demand from automotive and construction industries. In Europe, light vehicle sales declined by 8.6% in Q3 2022 as compared to Q3 2021. Aluminum demand is expected to increase further due to increased demand from the automotive, electronics, and packaging industries.
In Asia, aluminum production increased by 6.2% in Q3 2022 as compared to Q3 2021, and it is expected to increase further in Q4 2022 as well. The production increased in Q3 2022 due to production resumption and establishment of new capacity. Prices also decreased considerably for aluminum and associated products in Q3 2022 as compared to Q3 2021, and it is expected to decrease further due to a decrease in raw material prices. In Asia, the demand for aluminum is expected to increase in the next quarter, driven by the increase in demand from various end use industries, such as automotive, electrical, and industrial.
In ROW, aluminum production increased by 1.5% in Q3 2022 as compared to Q3 2021, and it is expected to increase further in Q4 2022. The aluminum demand increased in ROW due to increased demand from end users, like automotive. In ROW, light vehicle sales increased by 25% in Q3 2022 as compared to Q3 2021. Aluminum demand is expected to increase in this region in Q4 2022 due to the recovery in market conditions and aluminum consumption.
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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