AUDVF - Top Aluminum-producing Countries

Aluminum is an important industrial metal used in a wide range of applications and considered a critical metal to economies around the world.

Aluminum is one of the Earth’s most abundant metals and is produced from cryolite and bauxite mining. This is because the two minerals are large sources of aluminum; bauxite is processed to create alumina, which is then refined to create aluminum.

Aluminum is one of the most in-demand industrial metals because it is extremely versatile. The silvery metal is non-toxic and lightweight, perfect for making food and beverage cans; it also has a high thermal conductivity, is corrosion resistant and can be easily cast, machined and formed.

It is used in a huge variety of products, including cans, foils, kitchen utensils, window frames, beer kegs and aeroplane parts, as well as a host of new applications that make it an important element in the green revolution.

Because the metal is a good electrical conductor and is less costly than copper and other more expensive metals, it is often used in electricity transmission lines. It is also the second most malleable metal and sixth most ductile. It is non-magnetic and non-sparking.

Aluminum is often used as an alloy in steel manufacturing, mixing with stronger, less adaptable metals like copper, manganese , magnesium and silicon. This increases the strength of the resultant material but allows it to remain relatively light.

One last benefit of aluminum is its high recovery rate. According to the International Aluminium Institute , because aluminum can be recycled time and time again, it has as much as 95 percent energy savings compared to primary production costs.

In 2018, the United States added aluminum to its critical metals list, however the world’s largest economy does not have enough domestic aluminum supply to meet its industrial demand. In 2020, the country produced only less than half as much of aluminum metal as it consumed, meaning it must turn to aluminum imports.

China is the world’s largest aluminum producer by far, however the ongoing trade tensions between the two biggest economies on earth means the US can’t rely on China for a secure aluminum supply chain.

The US Geological Survey notes that world aluminum output increased slightly in 2020, coming in at 65.2 million metric tons (MT) compared to 63.2 million MT the previous year.

Here’s a look at the world’s top aluminum-producing countries. Data was taken from the US Geological Survey’s 2020 report on aluminum .

1. China

Mine production: 37 million MT

First on this list of aluminum-producing countries is China. The world’s leading producer was once again responsible for more than half of global aluminum output in 2020. It put out 37 million MT, and also consumed a considerable amount of the metal.

China placed another 300,000 tonnes of annual smelting capacity into production in December 2020, CRU analyst Wan Ling told Reuters. Ling expects aluminium production in China to grow by another 6.5 percent in 2021.

2. Russia

Mine production: 3.6 million MT

Russia is tied with India for second largest aluminum producer, but its output was significantly lower than China’s. Last year, it produced 3.6 million MT of aluminum, down slightly from 3.64 million MT in 2019. Leading global aluminum producer RUSAL is headquartered in Moscow and is the world’s sixth largest aluminum company. It was taken over in 2015 and is now part of China Hongqiao Group (HKEX: 1378 ).

Russia encountered its own import issues with the US in 2018. In early April, the Department of the Treasury issued sanctions on the sole primary aluminum producer in Russia due to activities between the owners and the Russian government. Those sanctions were later lifted and the treasury announced that companies could again import from Russia at similar levels to those prior to the 2018 sanctions. In 2020, 9 percent of US aluminum imports originated from Russia.

3. India

Mine production 3.6 million MT

Aluminum production in India grew a fair amount in 2018 and has been on the uptick since 2017. Last year, production totaled 3.6 million MT, in lockstep with Russia’s production for another year in a row.

Hindalco Industries (NSE: HINDALCO ), the world’s leading aluminum rolling company, is located in Mumbai and is said to be among the largest producers of primary aluminum in Asia. Concern that Indian exports may be impacted by a Chinese ban, or limitations on the amount of scrap aluminum the country imports, has weighed on the Indian sector. However, the Chinese government lifted the import ban in late 2020. Yet, India may be considering its own ban on scrap aluminum imports from major producers such as China in order to protect its domestic aluminum producers.

4. Canada

Mine production: 3.1 million MT

Last year, Canada’s aluminum production ticked up slightly from the previous year’s total, coming in at 3.1 million MT in 2020 compared to 2.85 million MT in 2019. Rio Tinto (NYSE: RIO ,ASX:RIO,LSE:RIO), another leading global aluminum producer, has roughly 16 operations in the country.

The province of Quebec is the main aluminum jurisdiction in Canada. There are 10 primary aluminum smelters in Canada in total. One is in Kitimat, British Columbia, and the other nine are all in Quebec. There is also one alumina refinery located in Saguenay, Quebec.

Canada was once again the leading supplier of imported aluminum for the US in 2020, accounting for half of all imports.

5. United Arab Emirates

Mine production: 2.6 million MT

Fifth on this list of aluminum-producing countries is the United Arab Emirates. Aluminum production in the United Arab Emirates (UAE) has remained steady over the last few years. In 2020, the country’s output was 2.6 million MT for the fifth year in a row. That was a new record for the Arab nation, which has kept the pace since hitting the mark in 2017.

Emirates Global Aluminum is the largest aluminum producer in the Middle East and contributes 4 percent of all global aluminum. The UAE was the source of 10 percent of US aluminum imports in 2020.

6. Australia

Mine production: 1.6 million MT

Australia’s aluminum production was up marginally in 2020 at 1.6 million MT from 1.57 million MT the previous year. In addition to its work as a major aluminum producer in Canada, Rio Tinto also produces the industrial metal in Australia. The mining major sees aluminum as a valuable resource in the new automotive industry.

However, Australia’s aluminum industry has been struggling under the weight of heavy energy costs associated with smelter operations for a number of years now. “Australia is one of the world’s most emissions-intensive aluminium producers,” reports the Institute for Energy Economics and Financial Analysis (IEEFA). Renewable energy sources may be the answer to saving the country’s aluminum sector.

7. Bahrain

Mine production: 1.5 million MT

Bahrain’s aluminum production grew marginally from 1.37 million MT in 2019 to 1.5 million MT in 2020. The aluminium sector is one of the largest sources of export revenue for the Middle Eastern nation.

In 2019, Bahrain Aluminium (Alba) expanded its production capacity and now operates the largest single-site aluminium smelter in the world. The increased capacity is a boon for the significant local downstream aluminium products industry in the country.

8. Norway

Mine production: 1.4 million MT

Aluminum production in Norway remained the same in 2020 as the previous year, at 1.4 million MT. Norway and Iceland are the largest exporters of primary aluminum to the European Union.

Norsk Hydro (OTCQX: NHYDY ), a Norwegian aluminum and renewable energy company, has a number of aluminum projects and plants in the country, and in Germany and Brazil. At Sunndal, Hydro operates the largest primary aluminium plant in Europe. Hydro’s pilot plant in Karmøy, Norway, is the most climate- and energy-efficient aluminium production technology in the world.

9. United States

Mine production: 1 million MT

Ninth on the list, aluminum production in the US is still recovering to its 2015 level after dropping down as low as 741,000 MT in 2017. In 2020, the country produced 1 million MT of the metal.

According to the US Geological Survey, three companies operate seven primary aluminum smelters in six states, including one smelters that was idled at the end of 2020 and another four operating at reduced capacity.

Transportation applications accounted for the most US aluminum use in 2020, coming in at 40 percent. Packaging accounted for 21 percent of domestic consumption, with building and electrical coming in at 14 percent and 8 percent, respectively; consumer durables and machinery each accounted for 7 percent.

10. Iceland

Mine production: 840,000 MT

Last on the list, aluminum production in Iceland totaled 840,000 MT in 2020, down only 5,000 MT from the previous year.

Arctus Metals, in cooperation with Innovation Center Iceland has developed a new aluminum production technology designed to eliminate CO2 emissions from the production process. The company has successfully produced aluminum with this new method, which emits oxygen rather than creating CO2 emissions.

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Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.