Aluminum Due for a Global Demand Surge

Novelis exec says urbanization, sustainability will push consumption beyond current expectations

Speaking to an audience of manufacturers, investors, and traders, the president and COO of Novelis, Philip Martens, said urbanization and the need for “sustainable” materials will push aluminum demand beyond current expectations.

A top executive of one of the world’s largest aluminum product suppliers predicts that world markets are nearing a “tipping point” that will lead to a surge in demand for the light metal.

Speaking to an audience of manufacturers, investors, and traders, the president and COO of Novelis, Philip Martens, said urbanization and the need for “sustainable” materials will push aluminum demand beyond current expectations.

Novelis, a subsidiary of Hindalco Industries Ltd., is the world’s largest supplier of aluminum rolled products and a leader in aluminum can recycling.

"Beverage cans, food packaging, appliances, construction, transportation, and personal technology all are on the verge of a new boom in emerging markets," Martens said. "In transportation alone, products like shipping containers, trucks, commuter trains and automobiles … the opportunity is bigger than most observers have recognized."

He pointed to lightweight design as a critical factor in rising aluminum demand. "Without compromising strength, aluminum allows for light-weighting in the design of anything that moves," he said. "In a world constrained by fuel supplies, and as alternative energy sources come online, aluminum is the most plausible option."

Research has document the rising percentage of aluminum in automobile design over more than 30 years, trending toward a projected 10% of all automotive materials by 2020. Martens said that pace might accelerate. "We may be about to see a sharp turn in the next few years that would make the aluminum industry's current projections of demand look very conservative," he said. "We've been having talks with automobile manufacturers that are more than encouraging on this point."

He also pointed to lifestyle changes worldwide that will increase demand for aluminum packaging for food and other products. "In just the next few years, more than 2 billion people will cross the official threshold out of 'poverty' and adopt lifestyles the developed world would begin to recognize as working class," he said. "When you look at the global performance of beverage companies, it's clear that the capacity to manufacture aluminum beverage containers and other food packaging will struggle to keep pace with demand."

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