International trade
Canadian primary aluminium, a strategic metal, is at the origin of a large North American industrial chain at the heart of international trade and world geopolitics.
Traded in a commodity market, and attracted by the arbitrage of regional premiums, the metal is called upon according to the rules of supply and demand to meet the needs of the major regional consumption blocks that are North America, Europe and Asia.
Offer
Global production of primary aluminium in 2021 is estimated at over 69 million tonnes.
The global aluminium market has changed over the past 20 years. China, non-existent on the aluminium planet in 1996, now produces 57% of world production, followed by the Middle East (10%), India (6%) and Russia (6%). For its part, Canada ranks 5th in the world with 5% of primary production. Nearly 70% of the market is now dominated by sovereign funds or states, Canada being the exception.
Demand
Strategic material of the future in a decarbonized world, primary aluminium will experience a 19% growth in demand between 2023 and 2050.
The demand will come mainly from the transport sector (24%), followed by the construction sector (22%), the electrical sector (14%), and the machinery and equipment sector (11%).
Primary and recycled?
Recycled aluminium will be used increasingly and combined with primary metal to meet the growing demand and the need to reduce the environmental footprint through circularity. Canada will be at the forefront with its remelting capacity in its primary production plants.
Price
Aluminium: a commodity traded at the LME
The London Metal Exchange (LME) is the global trading centre where industrial metals, including aluminium, are traded. The LME reflects the state of the global market, taking into account inventories and global production data.
The LME price plus a regional premium determines the base price of unwrought aluminium for a given market.
Regional premiums reflect not only regional market balance, but also local market conditions as well as payment terms, applicable tariffs and delivery charges. There are 3 regional premiums: Midwest Premium (North and Central America), CIF MJP Premium (Southwest Asia, Japan/Korea, Middle East) and Metal Bulletin Premium (Europe and Africa).