Aluminum is one of the modern world’s most versatile and widely used materials. Thanks to advances in premium alloys that have been developed to meet a host of needs, our entire manufacturing base has been impacted by aluminum in some way. That’s why having a steady aluminum supply is so essential.
Aluminum can be found in the vehicles we drive and the mobile devices we use daily, but most people don’t put a lot of thought into where that aluminum comes from. For manufacturers, a healthy and robust aluminum supply chain is tremendously important to their bottom line. Any kind of disruption can interrupt your ability to do business.
That’s why today we’ll be looking at where aluminum comes from and which companies are responsible for mining and converting it into a product for manufacturing.
Aluminum is one of the most abundant elements on Earth
Did you know that aluminum accounts for approximately 8% of the Earth’s crust, making it the third most common element (after only oxygen and silicon)? While iron makes up the bulk of the Earth’s core, aluminum is still the second most abundant metal on the planet. One might assume that aluminum must be extremely easy to come by and therefore relatively cheap, but that is not the case.
Despite being plentiful, aluminum also happens to be one of the most reactive metals. This means that it easily combines with other elements, forming compounds and mineral ores so readily that it is unlikely you will find anything approaching pure aluminum in nature.
This is the reason why early scientists and chemists did not discover aluminum until the nineteenth century, although many had previously theorized of its possible existence. In practice, aluminum is most likely found in metal ores like alum (from which aluminum eventually took its name) and bauxite. The development of an aluminum extraction process that converts bauxite into alumina (the Bayer process), and then alumina into aluminum (the Hall–Héroult process) in the late nineteenth century was what finally made the use of this metal on an industrial scale commercially viable.
Who are the leading producers of aluminum?
With the relatively recent development of aluminum as an industrial material, it’s astonishing how quickly it has become indispensable to so many sectors. From food and beverage to transportation, including the modern aerospace industry, aluminum has made possible advances that would have been unthinkable a few decades ago. Despite its abundance, the availability of aluminum is still dependent on several factors, including geological, geographical and economical. It should also be noted that while aluminum can be found in many different minerals and ores, many of them, such as beryl, garnet, and cryolite, are even more difficult (read: expensive) to refine than bauxite.
Who are the primary producers of aluminum? The five countries with the largest bauxite production are Australia, China, Guinea, Brazil and India. Other countries known to have significant amounts of bauxite include Greece, Indonesia, Jamaica and Russia. Whereas Guinea has the largest estimated reserves, with 7.4 million metric tons of bauxite, the United States is only projected to have twenty thousand metric tons. That means most of the aluminum used in America must be imported from somewhere else.
Looking at the above list, you might assume that Australia is the largest producer of aluminum, but China is. China’s aggressive state policy calls for the purchase of large amounts of raw materials, and that includes bauxite purchases from countries including Guinea and Australia (https://www.wsj.com/articles/chinas-cosco-plans-to-buy-25-ships-to-move-bauxite-from-africa-1541164586). Bauxite is getting shipped to China, where it is then refined into aluminum.
It should be no surprise then that three of the top four and four of the top seven aluminum-producing companies are based in China (Good chart here: https://www.statista.com/statistics/280920/largest-aluminum-companies-worldwide/). The largest of these is Chalco. Its full name is the Aluminum Corporation of China, and it is headquartered in Beijing. Its primary activities are aluminum refining (converting the bauxite into alumina) and primary aluminum smelting (processing the alumina into aluminum), as well as smelting a wide range of aluminum alloys. In 2013, the company had revenue of 10 billion USD.
The next biggest aluminum producer is China Hongqiao Group, with its headquarters in Huixian, China. The fourth largest aluminum producer is Xinfa Group, based in Shandong, China, while the seventh largest is State Power Investment Corporation, also headquartered in Beijing.
The number three company on the list of aluminum producers is Rusal, based in Moscow. It had been the leading producer until it was surpassed by Hongqiao (and then subsequently Chalco) in 2015. It now accounts for 9 percent of the global production of aluminum. The other top companies include Rio Tinto (UK/Australia) and EGA Al Taweelah (United Arab Emirates). The 8th largest producer of aluminum is Alcoa, based in Pittsburg, Pennsylvania.
What can have an impact on the final cost of aluminum?
It should be clear that most of our aluminum in America must come from other countries. This means that the price largely depends on global factors and international trade agreements. The current trade war between the US and China is one of those factors, as is the recent dispute with Russia, which led to Rusal being named to a list of blacklisted companies. International production capacity plays heavily into the supply stream, with Chinese companies sustaining production levels above required demand.
The good news about aluminum, however, is that it’s easily recyclable, making it one of the most sustainable materials we have at our disposal. Because of the abundance of bauxite and the ability to reuse aluminum indefinitely, it is projected that we will have enough aluminum to meet global demand for many decades, if not centuries.
Your professional aluminum provider
No matter what economic cycles the market goes through, Clinton Aluminum remains a constant. As the Midwest’s leading supplier of aluminum and stainless steel products, our team of dedicated and knowledgeable professionals is ready to help you through every step of the procurement process. Contact a member of our friendly sales team today to learn more.
