Can the price of aluminum be secured (hedged) for a purchase/delivery in the future?

A big advantage of aluminum over other materials is that it’s very easy to secure a price for any transaction in the future. An example would be a large amount of aluminum that’s ordered today and will be used for a bridge but only delivered a year or so after. The global base price of aluminum can be hedged at the London Metal Exchange (LME). In fact the most traded price is the so-called 3M price (i.e., for delivery in three months from now), which comes from a time when a ship would take three months to bring tin from Malaysia or Copper from Chile. Aluminum can be traded at the LME as far out as 63 months (i.e., five years and three months). As metal is required for example in North America, and there is a “regional premium” over the LME price (the so-called U.S. Midwest Premium) that isn’t traded in London, this local premium can be traded (and therefore hedged) at the Chicago Mercantile Exchange (CME). With this the full price of primary aluminum can be hedged and secured for transactions/deliveries in the future, so that large projects are not exposed to metal price fluctuation risks.

Is primary aluminum cheaper in Quebec because there is so much produced in the province?

Primary aluminum has one global base price, which is determined at the London Metal Exchange (LME). No primary aluminum producer would sell below this price, as they could simply sell their metal at that price directly on the exchange. The metal bought at the LME can be at any producer’s location (in other words, the location is at the seller’s discretion). This means that a consumer would need to bring it to wherever
it is needed. 

To avoid this, however, there is a second factor concerning the primary aluminum price, which is a regional market premium that exists in every major consumer region. In Japan it is called “CIF Japan,” whereas in Europe it is “GW premium paid in-warehouse Rotterdam.” In North America it is the “Midwest U.S. Transaction Premium” (MWP). This LME price plus the MWP together form the “Midwest U.S. Transaction Price,” which is the price for primary aluminum delivered and duty paid in the Midwest region. Consumers outside the Midwest can get a small discount or premium if they’re close to a producer, but the discount is usually very small. All Quebec-based aluminum producers can sell in the U.S. basically duty free and will not sell their metal much cheaper in Quebec.

What determines the price of aluminum?

The global price of primary aluminum is determined at the London Metal Exchange (LME). Many factors influence the price, like:

  • Global supply and demand for the metal
  • Economics of aluminum production, especially the price of energy
  • Inventories: The higher the inventories, the greater the downward pressure on the price, and vice versa
  • Regulatory changes: An embargo, like the U.S. placed on Russian metal, changes the market dynamics and impacts the price
  • Exchange rates: Aluminum is traded even at the LME in U.S. dollars, but most of the production and demand are outside of the U.S.
  • Investors buying metal when the current price is low, expecting the price to go up in the future

There is also a regional market premium on the LME price. In North America it is called the “Midwest U.S. Transaction Premium” (MWP). It depends on basically the same factors, but on a regional level. Regional deficits like we have in North America require a high premium to attract offshore metal. A duty in one country or region is a regulatory change that directly impacts this regional premium, as is the case for the MWP. Together the global LME price and the regional premium form the “all in” price of primary aluminum.

Why is aluminum more expensive than steel?

Primary aluminum production is extremely energy intensive, which is the main factor responsible for the high cost. Between one third and one half of the cost of making aluminum is the direct and indirect energy needed to produce it.  

After that, most of the cost is attributable to the alloy ingredients, which are usually cheaper for most aluminum alloys than for many types of steel. The main ingredients of aluminum alloys are silicon (Si) and magnesium (Mg), while main alloy ingredients for steels are often very highly priced elements like nickel (Ni) and cobalt (Co). For this reason we need to clearly distinguish which type of steel we’re comparing with aluminum. The most common mild steels and carbon steels are usually less expensive than aluminum (on a per kg or per ton basis). It’s very important to take all factors into account, including the transformation process, tooling and assembly costs, as well as lifetime costs (e.g., maintenance). For example, if we compare stainless steel and aluminum and consider aluminum’s corrosion resistance, then steel tends to be more expensive. 

How much does aluminum cost, and how does it compare to steel?

Both aluminum and steel are commodities. Their prices are determined by many factors, but mainly by supply and demand. Although there are some similarities, their markets are very different, which has a big impact on their prices. As a rule of thumb, aluminum costs about three times more than steel. So if a pound of steel is around 0.30 USD/lb, aluminum will be around 0.90 USD/lb. At the same time, aluminum represents only one third of the weight of steel. 

There are also big differences in pricing depending on the specific type and alloy. Generally, the price differences between different steel types are much greater than those of different aluminum alloys. This is due to the alloy ingredients—for aluminum, lower priced metals like silicon and magnesium are used, but for steel, more expensive elements with volatile prices are used, like nickel and cobalt. 

Why aren’t all engineers familiar with calculations for aluminum structures?

Reference books on the subject for aluminum are relatively recent. The first one1 that was published in Canada was released back in 2003, while the revision of the CAN/CSA S157-05 standard is more recent. The training of engineers in universities cannot be done without these tools. These resources are, however, critical to engineers’ training. That’s
why the aluminum industry has to proactively approach institutions to educate them about the importance of including the sustainable metal in their curriculum. Initiatives to encourage on-the-job training, like scholarships and recycling courses, are relatively recent.

For a long time, universities have offered undergraduate programs that essentially focus on traditional materials like steel, concrete and wood. The tide is slowly starting to turn, but aluminum does not yet enjoy its rightful place in university programs. That said, the rising cost of steel means that more and more engineers and architects are turning to aluminum. And that’s great news, because as demand increases, so will the need for training.

Is there any training to learn how to calculate aluminum?

Civil engineering courses teach future engineers to calculate the forces to which the elements of a loaded structure are subjected. The materials used in structures such as steel, concrete, wood and aluminum each have their own mechanical characteristics that must be taken into account in the detailed calculations. 1 Since they’ve been used for so long, the characteristics of old traditional materials such as steel, concrete and wood are integrated into structural design software, but not aluminum. For reasons related to manufacturing difficulty, traditional materials are made available in standard profiles, which make it easier for engineers to learn how to use them, ensure compliance with standards and ultimately choose those materials. But aluminum’s extrudability allows for complex shapes and contours, providing a clear advantage for structural design.

Additional training is offered to engineers working in the aluminum industry to address the lack of training with aluminum alloys. Some are ad hoc,2 while others are offered as part of specialized training.3,4 Since these short programs are offered on a one-off basis, it’s best to check the schedule directly with the institutions offering the training.

Is aluminum weldable?

When we talk about aluminum, we are referring to aluminum alloys. There are many welding techniques, and some of them are well suited for welding aluminum. 1, 2 The choice of welding techniques will depend on the shape of the part, the quantity and the alloys to be welded.

Fusion welding of metal at a joint, with or without the addition of metal, does not give satisfactory results with some alloys. The existing knowledge base includes all the practices and advice for welding an alloy or alloys together, as well as the ideal alloy for the filler metal (generally required) using a particular welding technique (e.g., TIG, MIG, etc.). The aluminum alloys used for manufacturing are delivered with enhanced mechanical properties through heat treatment and/or mechanical treatment, which hardens them. The temperature reached in the joint largely eliminates this hardening. It’s the role of engineers to take this into account in the design of a part, which often leads to a more or less oversized part. 2 

Friction stir welding, a fusion-free welding technique almost exclusively used for aluminum, makes it possible to weld all alloys without almost any loss of mechanical properties, including for problematic foundry alloys.3 When geometry and quantities are adapted to the process, this technology can become an essential asset for aluminum and product quality.

What is the lifetime of an aluminum structure vs. a steel structure?

A structure is the framework that supports all loads such as traction, compression and torsion. If the loads are static and the strength limit of the material is respected by the design, in principle the service life is infinite if corrosion is ignored. However, when the mechanical stresses appear as cyclic loads, metals will suffer damage such as material fatigue (i.e., appearance of micro-cracks), leading to failure after a number of cycles depending on the weight of the load. 1, 2

When it’s possible to see this type of stress, it’s possible to predict the service life before failure occurs. This is thanks to the large number of mechanical tests performed on each metal. Since the loads on structural elements depend on the design, engineers design the structures and dimensions of the structural elements and their connections (i.e., welded, glued, bolted) to ensure a sufficient and safe service life for the selected metal alloy. Steel has the uniqueness of having a stress threshold that gives an infinite service life. A design based on this threshold is not optimal or required for all types of structures.

The level of safety is partly based on a lack of knowledge of in-service stresses, so designers who want to lighten the components of their structure (e.g., frame members and vehicle chassis) compile data to measure these in-service stresses. For optimal product use, it’s often necessary to decide on the service life requirements during the design phase.

What happens if aluminum comes into contact with steel?

It all depends on the contact conditions. To be sure, contact between steel and aluminum can accelerate the corrosion of aluminum, so this issue should be considered. Without the presence of water to act as a conductive liquid, galvanic corrosion cannot occur.1, 2 Metal contact between aluminum and steel is also required to form a short-circuit and create a corrosion current, as in the case of a battery. 

In the case of rain that can dry, when the wetting time remains short overall, galvanic corrosion may not be a concern. But in any environment exposed to water, short-circuiting is prevented for bolted connections by placing insulation (preferably waterproof) between metal surfaces (steel-bolt-aluminum) or by using a coating on the surfaces to isolate them from each other or from water. In some environments, stainless steel bolts can be used to assemble aluminum. A phenomenon called passivation considerably slows down galvanic corrosion of aluminum, but the time it takes for this type of assembly will need to be taken into account. 

Aluminum is more “noble” than zinc, so it’s protected by the zinc coating on galvanized steel. But since zinc is similar to aluminum, it will corrode slowly, making it important to plan ahead for when this protective zinc coating disappears.

What are the major differences between steel and aluminum?

The density of aluminum is three times lower than that of steel, which gives aluminum a definite advantage for transportation. 

Electrical and thermal conductivity depends on the purity of the metal, but generally speaking it is three times higher for aluminum. Combined lightness and conductivity make aluminum indispensable for power transmission lines. The melting temperature of aluminum alloys is about two times lower than that of steel, which means aluminum can be cast in steel molds, a method that considerably reduces manufacturing costs.

Aluminum is also very malleable at a temperature near its melting point, making it very easy to extrude. This “extrudability” makes it possible to create highly complex aluminum profiles that would be impossible to produce using steel. Aluminum offers enormous potential for designers and product design engineers alike.

Where does aluminum come from?

Aluminum is obtained through the electrolysis of alumina. But where does alumina come from, and how does the liquid aluminum produced in this way become the lightweight parts used by MAADI Group to build such strong structures?

This website gives an overview of the stages leading from bauxite—the main ore used in aluminum production—to finished products. Other diagrams illustrate these different steps:

  • Alumina (Al2O3) is chemically extracted from bauxite, which generally contains 40 to 60% of the compound.
  • Alumina is then melted at around 960°C and then, through electrolysis, the alumina splits into oxygen and aluminum (Al). 

Various avenues allow manufacturers of finished products to take advantage of the extraordinary potential of aluminum, such as:

  • Development and casting of specific alloys into ingots, billets, etc.
  • Moldings that meet the specific needs of transformers, such as the different nodes designed and used by MAADI Group to manufacture MakeABridge® bridges.
  • Ingot rolling and billet extrusion, like the extrusions designed and used by MAADI Group to build its structures.

Quebec producers ensure that each of these steps is carried out with respect for the environment and human health. These producers ensure that the aluminum produced in Quebec is one of the cleanest—if not the cleanest—in the world. For this reason MAADI Group is proud to use Quebec-made aluminum in all of its products, including gangways, pedestrian bridges, marina decks and more.

How do companies recycle aluminum?

Aluminum is generally combined with other metals to improve its properties. These aluminum alloys are divided into families according to the filler metals. The compositions must comply with recognized standards in order to guarantee the specific properties of each alloy.

Manufacturing companies (e.g., aircraft, automotive and appliance makers) use a number of alloys in their products and recycle scrap, machining chips and defective components. Re-melting together scrap of different compositions would produce an alloy that doesn’t meet any standard. This is why it becomes necessary to sort them properly so as not to mix them. Normally these companies will sort the scrap metal at the production plant so that it’s not devalued by the recycler. Otherwise, the recycler will have to carry out this sorting on their own. The sorted waste is then crushed and decontaminated to remove any pollutants (e.g., varnish, paint, oil).

The final step is the fusion of this sorted and packaged waste to produce ingots corresponding to the original composition, known as “second fusion” ingots. When the composition of these ingots corresponds to that of a foundry alloy, they are then sold to foundries to make new parts. They can also be re-melted like the alloys produced in the casting centers of aluminum smelters to produce rolling ingots or extrusion billets.

Is it true that aluminum causes Alzheimer’s?

This hypothesis has occasionally attracted attention, however it isn’t supported by public health protection agencies and related associations. In particular, the World Health Organization (WHO) reports the following:

There is little indication that orally ingested aluminum is acutely toxic to humans despite the widespread occurrence of the element in foods, drinking water and many antacid preparations. It has been hypothesized that aluminum exposure is a risk factor for the development or acceleration of onset of Alzheimer disease (AD) in humans. The 1997 WHO EHC document for aluminum concludes that: On the whole, the positive relationship between aluminum in drinking water and AD, which was demonstrated in several epidemiological studies, cannot be totally dismissed. However, strong reservations about inferring a causal relationship are warranted in view of the failure of these studies to account for demonstrated confounding factors and for total aluminum intake from all sources.

According to the Alzheimer Society of Canada, after noting that for more than 40 years researchers have studied the potential links between aluminum and cognitive impairment, it summarizes its position by stating that current research offers no convincing evidence of a link between aluminum exposure and the development of cognitive impairment.

Is aluminum harmful to human health?

Aluminum is the third element of the Earth’s crust and its most abundant metal. Various organizations have studied the supposed effects of aluminum exposure on human health, including government public health agencies, associations and industry companies concerned about the topic.

From the sources below, it’s important to remember the following:

  • Aluminium is present in many consumer products, such as antacids, buffered aspirin, antiperspirants, cosmetics and food additives.
  • In the United States an adult eats 7 to 9 mg of aluminum per day with food.
  • Neurotoxic effects have been reported in dialysis patients treated with dialysis fluids containing aluminum.
  • There is currently no evidence to support a link between aluminum exposure and the development of breast cancer or Alzheimer‘s disease.

Except in the particular case of dialysis patients, no health concerns should therefore be associated with the use of aluminum.

How has recycling and the secondary aluminum production changed in the past years?

Globally, primary aluminum is still the dominant source of aluminum, but recycling and therefore secondary aluminum production has grown significantly and steadily over the past decades. Secondary aluminum production now represents around one third of the global aluminum production. In certain countries, such as in the U.S. and Japan, it has even surpassed by a large percentage primary aluminum production. Most aluminum goes into long-lasting items such as building and construction and therefore requires many years before it’s available for recycling. However in some areas high-recycling rates (e.g., aluminum cans) and “closed-loop recycling” systems (e.g., automotive industry for car body scraps) are put into place which maximise recycling rates and efficiencies. Secondary recycled aluminum only requires 5% of the energy of primary aluminum and generates equally less CO2. This is the reason that energy costs and environmental awareness by consumers are huge drivers for secondary aluminum production. Aluminum can be endlessly recycled, though special care must be taken to maximise its value. This is why recycling into the same or similar alloys is very important. Sorting and cleaning technologies for scrap have significantly improved in the past years, which now opens many opportunities for the integration of clean scrap into high-tech products without compromising quality and performance.

Is aluminum recyclable (compared to steel)?

Yes, aluminum is just as recyclable as steel. And due to its much lower melting point, it is also much easier to recycle. In the industry we distinguish between industrial (or pre-consumer) recycling and post-consumer recycling. Industrial recycling is often done in so-called “closed loop systems.” For example, an automotive stamping factory will return all scrap directly back to its sheet metal supplier that will then re-melt the scrap, and, with very little loss, put it back into new sheet for that same plant. 

Post-consumer scrap is either also directly recycled back into the same or similar products. The best example is a pop can, or vehicle wheels. When these items come back as a scrap mix, they are separated and then recycled using special processes. An extreme example is the non-ferrous remains of a scrapped car that was shredded. It goes through different separation processes that allow materials such as plastics and rubber to be separated from the non-ferrous scrap pieces. Those scrap pieces are then re-melted into a die-casting alloy called A380 that is typically used to cast a wide variety of products, from engine blocks to furniture brackets. Aluminum is endlessly recyclable and does not lose much of its value. It is important to recycle it as much as possible back into the same alloy (or alloy family) in order to conserve the maximum value.

Are exorbitant amounts of electrical energy used to produce aluminum?

On a global average, about 14 MWh (Megawatt hours) are required to produce one ton of aluminum. This seems very high, but the number has been coming down with advancing technologies. In the 1980s this number was over 17 MWh, and in 1990 it dropped to around 16MWh. 

The new smelters in China are already quite a bit below this number. China on average is at only 13 MWh per ton of aluminum. The most important factor for the reduction came from replacing Söderberg smelting technology with the “prebake” process to bring the number  down to 12-16 MWh/ton of aluminum. Most new smelter technologies around the world are now at about 12 MWh/t of aluminum. Rio Tinto and Alcoa are working on “carbon free” aluminum with their new joint venture (Elysis).

Are the red sludge from alumina production harmful to the environment?

Yes, especially if not treated properly. As the by-product of alumina refining, it has a very high pH content. This is due to the sodium hydroxide solution from the refining process, which can burn and damage airways if fumes are inhaled, or kill animal and plant life if released. Although the environmentally hazardous disposal of the substance in rivers, lakes and oceans has been discontinued, red mud is still typically kept in open reservoirs susceptible to leaks and floods. An example of this was in Hungary where, in October 2010, it escaped killing 10 people and causing environmental damage. When red mud is left to dry in a pond for several years, it becomes buried or mixed with soil, presumably burying the harmful parts along with it. The mud is comprised of particles, such as toxic heavy metals, and may also be slightly radioactive if the original bauxite contained such minerals.

The upside is that more methods to use red mud in an environmentally friendly way are being developed. At the moment there’s only a limited use for it as a pigment in the manufacture of bricks to use one example. While it contains useful elements like caustic sods, iron, titanium and aluminum, there currently isn’t a method to extract these elements that’s economically viable.

Is bauxite mining harmful to the environment?

As with almost all mining activities, there is a direct negative impact on the environment, especially if the mining is done too aggressively or carelessly. For this reason most major aluminum companies work to implement “sustainable mining” initiatives. Among other things, bauxite mining impacts the environment the most through air pollution, as exhaust gases from mining vehicles and heavy machinery and dust particles are produced and spread through various avenues during the process. These are inhaled by miners and nearby communities. Where the coarser pieces can be coughed out and are less of an issue, the fine particles tend to lodge themselves in the lungs (alveoli), which can lead to respiratory and cardiovascular problems. Additionally, heavy metals such as lead and arsenic can be accidentally drained into water sources (especially for drinking), and as they do not degrade, they deposit at the bottom and are taken up by plants and various animals, in which levels are much higher than they should be. The heavy metals may also be mobilized through water, flushed downstream and deposited into clay minerals or absorbed by algae. This accumulates and causes dangerous levels, therefore affecting many organisms. Mining can also lead to soil contamination, as heavy metals cause a decrease in microbiological activity, meaning nutrients are not released into soil, lowering fertility and restricting plant growth. In this case, many habitats are destroyed, soil erosion is facilitated, and vegetables that have grown there may have high levels of heavy metals. Making sure to source aluminium from a responsible company that practices responsible and sustainable mining is therefore very important.

How much carbon emissions are generated by the production of 1 kilogram of aluminum versus steel?

As in many cases, this really depends on where the metal is produced and especially what type of energy was used to produce it. On a global average basis, one kilogram of steel produces 1.83 kg of CO2, while one kilogram of aluminum produces over 12 kg of CO2. Unfortunately, most of the recent capacity expansions have taken place in China, where coal is the dominant energy source used. In the past decades, aluminum production capacity has also increased in the Middle East, where the use of primarily natural gas generates fewer carbon emissions. 

Outside of those two regions, aluminum production had been shifting to renewable energy sources (predominantly hydroelectric power, used in 100% of all Canadian aluminum production), until the U.S. began reviving old and obsolete coal-powered smelters. However, both the steel and aluminum industries worldwide are working hard to reduce their carbon footprint, and with the Rio Tinto – Alcoa Joint Venture (Elysis) we seem to be relatively close to making this a reality in the
not-too-distant future.

Is it true that aluminum production has a worse carbon footprint than steel production?

On a global basis, steel is responsible for 7 to 9% of all energy system emissions. The global steel industry therefore contributes 2.8 Gt per annum of CO2, and each ton of steel produces on average 1.83 tons of CO2 (according to the World Steel Association). Primary aluminum production is more energy intensive and its carbon footprint is 4 to 6 times higher than that of steel (on a global average) if calculated per ton of metal. Once each metal is recycled, the carbon footprint in both cases is substantially lower, but in theory it is still higher for aluminum than for steel. It is therefore very important to use each material in the right situation for the right product, so that over the full lifespan (from cradle to grave – or even back to cradle) the carbon footprint is minimized. 

For this we need what’s called a “life-cycle analysis.” One example is the transportation industry, which uses a lot of both steel and aluminum and accounts for about 19% of all man-made CO2 emissions. Eighty percent of all greenhouse gas emissions are produced during the operating life (i.e., not the production of a car/bus/truck/etc.), and a 10% weight reduction (by using the right material) can yield fuel economy improvements of 5-7%. For example, reducing the weight of a city bus by 1 kg can save 40-55 kg of CO2. This is a perfect example of why just looking at the initial carbon footprint of a material will not give us the full picture of the best usage for a specific product. That’s why a full life-cycle analysis is needed.

Does aluminum production generate large quantities of greenhouse gas emissions?

Primary aluminum production is very energy intensive and generates large amounts of direct and indirect emissions. Direct greenhouse gas emissions come primarily from the use of fossil fuels in the alumina calcination process, but also from process-related conditions in electrolysis, such as consumption of carbon anodes (CO2) and PFC emissions (PerFluoroCarbon) from anode effects. The main energy consumption is the electricity used for the electrolysis process in aluminum smelters (causing indirect emissions). But the refining of alumina from bauxite ore also requires a significant amount of energy (to produce the solution of bauxite in caustic soda, for the calcination process and for the recovery of caustic soda after use). 

Improving energy efficiency is essential for the aluminum industry, both from an economic and environmental point of view. Reducing greenhouse gas emissions from energy use and from the electrolysis processes is therefore important to reducing the overall carbon footprint of primary aluminum. The aluminum industry has been working on this with significant success over the past century. 

Countries like Canada, Iceland and Norway use hydroelectric power, a renewable energy source, to produce aluminum. Recycled aluminum only requires 5% of the energy and generates therefore only a very small fraction of the greenhouse gases that primary aluminum does. Using aluminum made from renewable energy and with the highest possible recycled content guarantees the smallest carbon footprint and lowest greenhouse gases possible.1

Is aluminum more damaging to the environment than steel?

The answer depends on the application and what type of aluminum or steel you are comparing. Primary aluminum production is very energy intensive—the carbon footprint worldwide is estimated to be between 8 and 12 tons of CO2 per ton of aluminum (depending how it is calculated and who you ask). Steel’s carbon footprint is only about 2 tons of CO2 for 1 ton of steel. However, depending on where the aluminum was made and with which energy source, aluminum’s carbon footprint can be much lower. For example, in Canada, primary aluminum’s carbon footprint is only 2.5 tons of CO2 per ton of aluminum. Steel is also 3 times heavier than aluminum, which makes comparing “per ton” an unbalanced comparison. 

Aluminum is extremely durable and easily recyclable. Recycled aluminum’s carbon footprint is only 5% of that of primary aluminum. Aluminum is used because it is lightweight and has a high strength-to-weight ratio. In many products—especially in the transportation industry—it helps save a significant amount of CO2 emissions during the use phase of the vehicle. So to accurately compare the environmental impact of materials,
a full “life-cycle analysis” needs to be done.

Does aluminum contribute to or help mitigate the effects of climate change?

Primary aluminum production is very energy intensive and can have negative impacts on the environment and climate. But, when put to use, aluminum can have very positive impacts on climate change because of its properties:1

In the transportation industry, aluminum’s light weight increases efficiency and reduces fuel consumption and emissions.2

Durable and corrosion-resistant
Aluminum can last much longer than other materials without any protective finishing. In fact, 75% of all aluminum ever produced is still in use, so its true environmental impact can only be calculated at its true end of life (and through a full life cycle analysis).3

Easily recyclable with a high scrap value 
The aluminum content in certain products (like cars) encourages higher recycling rates.3 Creating new materials from recycled aluminum only requires 5% of the energy needed to produce primary aluminum. It’s relatively easy to recycle and has a very high scrap value. 

Infinite possibilities
Aluminum offers designers infinite possibilities for optimizing their products, both in terms of shape and properties (for example, architects can leverage aluminum’s high reflectivity to keep a building from heating up in the sunlight).

Is aluminum production harmful to the environment?

First we need to distinguish between primary and secondary aluminum production. Secondary aluminum production from recycled aluminum only uses about 5% of the energy (and hence only produces about 5% of CO2) of primary aluminum. Secondary aluminum is therefore always less harmful for the environment. However special attention must be paid to the recycling process and to possible emissions by using special filters and so on.

Primary aluminum production is the globally dominant source of aluminum and contributes the most to the huge energy consumption and carbon footprint of aluminum overall1. It takes about 4 tons of bauxite to make 2 tons of alumina, which can be smelted into 1 ton of aluminum. The most dangerous environmental threat of bauxite mining is so-called “red mud” generation combined with the energy consumed to extract it from the earth and transport it to the refinery. Alumina production is energy intensive and depending on the source of the energy the environmental impact can be very different2. Most energy consumption and CO2 generation happens in the electrolysis process where alumina is smelted into aluminum. Several other emissions are also generated at this stage3,4. It is therefore important to do a full life-cycle assessment to assess the true impact of the aluminum used in a specific application. The higher the recycling content, the better it will usually be. Technological advancements, especially in the smelting technologies, are significantly reducing the energy consumption and might even bring us “carbon free” aluminum in the future5.

How has aluminum production changed compared to past years?

The main change over the past years and decades has been in the global primary production volume, that has constantly gone up from less than 30,000 tons about 15 years ago in 2014 to almost 65,000 tons in 2018 in the regions where it is produced.

In 1990 China produced only 5% of the global aluminum. Since 2014 Chinese production has represented more than 50% of the global production, while Europe, Africa, North and South America have not seen any significant growth in production volume in the same timeframe. Other than China most of the growth in production took place in the Middle East, and other Asian countries. With innovations in aluminum smelting technologies the energy required for production has been consistently declining. This has happened in China more than the rest of the world as most of the new smelters have been built there. In North America until the recent re-starts of old and idled U.S. smelters the hydro power share has been rising. Unfortunately coal has become the dominant source of energy, as most of the Chinese smelters use this as their energy source.

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