Channel News Asia  Mar 21  Comment 
The United States is in talks with the European Union, Argentina and Australia on granting possible exemptions to steel and aluminum tariffs, Trade Representative Robert Lighthizer told the House Ways and Means Committee in a hearing on Wednesday.
Wall Street Journal  Mar 20  Comment 
Finance ministers and central bankers from the leading economies failed to reach a new agreement on trade, amid a deepening split between the U.S. and other major nations on Washington’s plans to impose tariffs on steel and aluminum.
Forbes  Mar 20  Comment 
The Trump administration’s steel and aluminum tariffs could lead to increased inbound M&A into the US, according to industry experts.
Channel News Asia  Mar 20  Comment 
The world's financial leaders are likely to reaffirm on Tuesday their commitment to fight protectionism and recognize the need for "further dialogue and actions" on trade, just days before U.S. steel and aluminum tariffs are to enter into force.
The Hindu Business Line  Mar 20  Comment 
Arfin India on Tuesday said that it has bagged purchase orders worth ₹170 crore from JSW Steel for supply of various aluminium deox products and cored-wire products for 2018-19. On
Reuters  Mar 20  Comment 
Japanese trade minister Hiroshige Seko said on Tuesday that there was a high possibility Japan would be exempted from U.S. tariffs on steel and aluminium on per-item basis.
The Hindu Business Line  Mar 19  Comment 
The aluminium futures contract on the Multi Commodity Exchange (MCX) is showing signs of the downtrend getting reversed. The contract fell sharply after spiking to a high of ₹137.25  Mar 19  Comment 
The US Commerce Department started accepting companies' applications for tariff exemptions on Monday, potentially softening the blow of sweeping tariffs on steel and aluminum.
The Hindu Business Line  Mar 19  Comment 
The aluminium futures contract on the Multi Commodity Exchange (MCX) spiked to a high of ₹137.25 a kg on Wednesday last week, but could not sustain higher. The contract reversed lower from
Reuters  Mar 18  Comment 
The U.S. Commerce Department said it will begin accepting requests on Monday for product exclusions from President Donald Trump's new steel and aluminum import tariffs, but it could take up to 90 days for the agency to make determinations.


At roughly 1/3 the weight of an equivalent volume of steel, aluminum is lightweight yet strong enough for a wide range of uses. It is a good conductor of heat and electricity, resistant to corrosion, and non-toxic, making aluminum suitable for a variety of industries. Major markets for aluminum include various consumer and commercial end markets such as transportation, construction and building, and packaging.

Due in part to its presence in several other markets, aluminum prices are subject to various external forces as well as other markets' conditions. Changes in the industries that use aluminum in their products can have a significant impact on the aluminum industry itself. In addition, many of the end uses of aluminum involve the production of durable goods, which tend to fluctuate cyclically with changes in general macroeconomic conditions. The 2008 Financial Crisis and global slowdown in early 2009 has destroyed demand for many durable goods, causing aluminum's price to fall approximately 50% from mid 2008 to early 2009.

The final product of a three-stage production process, aluminum is made from an oxidized form of aluminum called alumina, which is in turn sourced from bauxite, a naturally-occurring source of alumina. Companies in the aluminum industry are generally involved with only one of the three stages of production, though some larger companies handle multiple stages in-house.

Prices, Tickers, and Delivery Dates

Aluminum futures contracts are traded on the New York Commodities Exchange under ticker symbol AL. Futures contracts are delivered in every month of the year. (For more information on commodity tickers, check out the ticker construction page.) Futures and traded average price options are also traded on the London Metal Exchange LME as well as other exchanges across the world.

Why aluminum prices rise and fall

U.S. aluminum shipments by end market (%), 2004
U.S. aluminum shipments by end market (%), 2004

Transportation Industry

Among developed countries, transportation is the single largest end market for aluminum. Changes in demand for automobiles, airplanes, commercial trucks, etc., can impact aluminum prices significantly.

Automobiles used to be made almost entirely of steel, but new passenger cars and light trucks now contain an average of 300 pounds of aluminum, a significant increase from fifteen years ago. Foreign car manufacturers have been quick to increase their use of aluminum, while the "Big Three" domestic auto companies Ford Motor Company (NYSE:F), General Motors (NYSE:GM), and Daimler Chrysler (NYSE:DCX) have been slower to trade steel for relatively more expensive aluminum, focusing instead on cutting costs and prices. On the whole, though, the auto industry's demand for aluminum is trending upward, which could cause aluminum prices to rise as well.

In the aerospace industry, aluminum has long been used to construct airplanes and helicopters, though there has been a recent rise in the use of carbon fiber composite materials. These composites are lighter than aluminum, stronger than steel, and much easier to assemble, a combination that poses a threat to aluminum's dominance in the aerospace industry. Airplane manufacturers have announced plans to build models composed of as little as 20% aluminum by weight, a significant decrease from the 50% of previous models. The rise of carbon fiber composites in aerospace manufacturing could decrease demand for aluminum and put downward pressure on prices.

Construction Market

The building and construction market accounts for a significant portion of the total demand for aluminum. In developed nations, around 15-20% of all aluminum produced goes to the construction end market, while this figure is higher in developing countries at around 30%. For residential construction, aluminum is commonly used in doors, roofs, and structural framing, while aluminum is used primarily for structural applications in the nonresidential market. Surges in residential or commercial construction can increase demand for aluminum, resulting in higher prices, while housing slumps or slow nonresidential construction can lead to lower aluminum prices.

Emerging Markets

The amount of aluminum consumed per capita is highly correlated with economic development. People in developed countries consume an average of 50-70 pounds of aluminum per year, whereas people in developing countries (countries with a per capita GDP of less than $10,000) consume less than 20 pounds per year, on average. As emerging countries become more developed, aluminum consumption in these countries will likely increase significantly. Considering the size of developing countries such as China and India, these emerging markets could cause substantial increases in both aluminum demand and prices.

Energy Costs

Energy costs can impact the aluminum production process. Smelting alumina into aluminum requires a constant, large supply of electricity, which accounts for around 25% of the costs of the entire smelting process. If energy costs become too high, smelters may be forced to shut down or move to a location where energy costs are lower. On the other hand, a decrease in energy costs can allow previously closed smelters to reopen, which would increase the supply of aluminum and lower prices.

Companies that benefit from falling aluminum prices

  • Coca-Cola Enterprises (NYSE:CCE) and the Pepsi Bottling Group (NYSE:PBG) both use aluminum to make cans for their beverages. Aluminum represents around 15% of CCE's production costs and 20% of PBG's. A decrease in the price of aluminum would lower their total costs of production, which could translate to higher profit margins.
  • Third party manufacturers of beverage cans include Ball (BLL) and Amcor (AMCR). Firms like these depend on stable, long-term agreements with beverage companies, and these contracts allow flexibility for the supplier to pass production costs onto the buyer. There is typically a lag, however, between a price increase in aluminum and adjustment of the contract - and during this period, can manufacturers' profits suffer.
  • Toyota (NYSE:TM) and Nissan (NasdaqCM:NSANY), and to a lesser extent other companies like General Motors, Ford Motor Company, Daimler Chrysler, and Volkswagen (XETRA:VOW.DE), stand to benefit from falling aluminum prices. All automobile manufacturers use aluminum, though Japanese-made cars tend to contain a higher percentage of aluminum than the industry-wide average of 13% by weight.[1] Falling aluminum prices would lower auto makers' production costs, and the savings could either be kept as profits or reinvested in the company.
  • Boeing (NYSE:BA) and Airbus (Paris:EADF5.PA) both manufacture airplanes, which require large amounts of aluminum. Aluminum has traditionally been the primary material used to build airplane bodies, though composites are becoming more widely used by aerospace companies. Aluminum can compose up to 50% of an airplane's weight, so a decrease in aluminum prices could substantially lower aerospace companies' production costs.

Companies that benefit from rising aluminum prices

  • Alcoa (NYSE:AA), Alcan (NYSE:AL), Rusal, and the Aluminum Corporation of China (ACH) stand to benefit significantly from rising aluminum prices. These large companies are involved in aluminum production from bauxite mining to final aluminum smelting. Other companies in the aluminum industry are generally concentrated in only one of the three stages. Companies who produce the finished aluminum should benefit from higher prices, though alumina refineries could be somewhat slower to reap the benefits due to an oversupply of aluminum relative to demand.
  • The US Steel (NYSE:X), Nucor (NYSE:NUE), and General Dynamics (NYSE:GD) steel companies could all benefit from an increase in aluminum prices. Certain companies, such as auto makers, have been replacing steel with aluminum to take advantage of aluminum's lighter weight. Rising aluminum prices can slow this process, helping to curb these companies' migration away from steel.

Aluminum Futures


  1. Based on an average passenger car and light truck weight of 4,066 lbs and an average of 300 lbs of aluminum per vehicle.
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