Aluminum – Uses, Prices, and Production

This blog highlights information and data I have found on the Internet related to aluminum uses, prices, and production.   Price and production amounts represent global data.

Uses.  Several aluminum qualities, which make it an abundantly used structural metal, include light-weightiness; strength; durability; ductility; and malleability.   In 2018, aluminum accounted for the second highest sales revenues of all metals used in structural applications, behind iron’s use in steel.  Aluminum also has good electrical and thermal conductivity, with high use due to these properties.  Aluminum is useful as an additive in such products as glass and paint and is frequently alloyed with other metals, such as copper, zinc, and magnesium.  Aluminum finds use as a combusting agent, a reflecting surface, and in sound absorption.

Most aluminum, which does not occur separately as an element in the earth’s crest, is electronically separated from aluminum oxide (also known as alumina) after the oxide is chemically separated from bauxite rock.  Both the bauxite and the aluminum oxide have financially meaningful uses separate from the aluminum metal derived from them.   Bauxite serves well as an abrasive; as an anti-skid agent; and as an additive, e.g., in cement.  Aluminum oxide serves well as an additive in ceramics and glass, increasing their strength; as an absorbent; and as an abrasive.

Prices.  Bauxite and aluminum oxide prices are relevant to the aluminum market price.  Average 2018 price for bauxite was in the $30 per metric ton (mt) range and for aluminum oxide, in the $550 per mt range.   The 2018 aluminum average price was in the $2,100 per mt range.  The 2018 price of aluminum oxide varied significantly due to problems at some major bauxite-to-aluminum oxide processing plants.  

Industry knowledge suggests for aluminum producers to be profitable, the ratio of aluminum oxide to aluminum price needs to be less than about 20%.  With the average 2018 aluminum oxide and aluminum price ratio at about 26% ($550 per mt aluminum oxide price divided by $2,100 per mt aluminum price), 2018 was a difficult year for aluminum producers with respect to profit.

Production.  Internet data suggests that in 2018 approximately 300 million mt of bauxite was produced.  If the average bauxite 2018 price was $30 per mt, this gives a 2018 bauxite production value of approximately $9 billion (300 million mt times $30 per mt).

Internet data also suggests that in 2018 approximately 130 million mt of aluminum oxide was produced.   Assuming the average aluminum oxide 2018 price was about $550 mt, this gives a 2018 aluminum oxide production value of approximately $71.5 billion (130 million mt times $550 per mt).

And internet data suggests that in 2018 approximately 62 million mt of aluminum was produced.  Assuming the average 2018 aluminum price was $2,100 per mt, this gives a 2018 aluminum production value of approximately $130.2 billion (62 million mt times $2,100 per mt).

Based on the above production data, bauxite quantity mined results in aluminum produced having approximately 21% of the weight of bauxite mined (62 million mt aluminum produced divided by 300 million mt bauxite mined).

Also, assuming the above production data is approximately correct, the 2018 production value that the aluminum element adds to the global economy in terms of sales revenues is around $210.7 billion ($9 billion for bauxite; $71.5 billion for aluminum oxide; and $130.2 billion for aluminum metal).