Aluminum Production Continues Upward

Global production of primary aluminum—aluminum made from bauxite ore—increased by 4 percent in 2006.1 (See Figure 1.) That number represents a continuing slowdown in output in recent years from the high rates of 2002–05, when production increases averaged 6.5 percent annually.2 Nevertheless, the industry continues to grow globally as demand moves upward and as new production capacity is added.3 Meanwhile, global secondary (recycled) aluminum production was up in 2004, the latest year for which world data are available.4

Aluminum is the world’s second most popular metal, after iron. It is used to make transport vehicles from cars to airplanes to ships, in construction, in consumer durables such as appliances, and in packaging.5 Aluminum is made from bauxite ore, which is found near the earth’s surface and which usually requires open-pit mining to be removed.6 Bauxite is relatively plentiful, with the greatest reserves found in Guinea, Australia, Brazil, Jamaica, and China.7

Primary aluminum production is concentrated in relatively few countries. China alone produced 26 percent of the world total in 2006.8 The top five producers—China, Russia, Canada, the United States, and Australia—accounted for 59 percent of world output that year.9 (See Figure 2.) Production is found where energy is cheap because making aluminum uses gargantuan quantities of electricity.10 Indeed, the world’s largest aluminum smelter, now being planned for construction in Dubai, will have its own 2,600-megawatt power plant.11

Although growth in primary production has slowed, many of the top producers posted robust gains. China and India reported the greatest increases in aluminum output, at 12 percent and 11 percent respectively. 12 Bahrain, Brazil, and South Africa also posted large gains for the year, at 11, 7, and 5 percent.13 Growth globally was slowed by the 7-percent decline in production experienced in the United States, the fourth largest producer.14 This decline is part of a long-term pattern: primary production in this country has fallen by 57 percent since 1992.15 U.S. smelters were operating at only 62 percent of capacity, in part because of high prices for energy and alumina.16 Meanwhile, secondary aluminum production in the United States may also experience a slowdown as automobile manufacturing, a key supplier of scrap, declines there.17

Aluminum production accounts for roughly 3 percent of global electricity use.18 For some countries the share is much higher: in Australia, it devours 10 percent of the country’s electricity.19 The industry has become steadily more energy-efficient in recent years; electricity use per ton of output fell by 11 percent between 1980 and 2006.20 But increases in output have typically been greater than efficiency gains, sending total electricity use for aluminum higher each year.21 (See Figure 3.)

Aluminum from scrap (from manufacturing plants as well as aluminum products) reduces this metal’s environmental footprint because of its relatively low energy requirements. In the United States in 2006, roughly two thirds of aluminum used in recycling came from manufacturing plants; the remainder came from discarded products.22 Aluminum recycled from discarded products accounted for the equivalent of about 18 percent of aluminum consumption in the United States in 2006.23

The growing practice of making aluminum from scrap rather than from virgin ore will affect the location and economics of production in the future.24 Remelting (recycling) aluminum uses only 5–10 percent as much energy as making aluminum from ore.25 And because the energy efficiency of recycling aluminum is expected to increase faster than the efficiency of virgin production in coming years, the cost advantage will likely tilt further in the direction of recycling.26 This cost advantage, coupled with growing availability of scrap aluminum, are likely to decouple aluminum production from supplies of cheap energy.27

Aluminum, if recycled, has a number of environmentally friendly features, including light weight, which means products require less energy to transport, and strength, which means less is needed for a given function.28 Aluminum can be recycled many times over.