BRAZILIAN ALUMINUM - solutions for sustainable living

BRAZILIAN ALUMINUM SOLUTIONS FOR SUSTAINABLE LIVING 11 GLOBAL ALUMINUM MARKET OUTLOOK Green buildings also bring opportunities for use of aluminum, once they are a sort of facilities where recycling and eco-efficiency in construction is critical, demanding architectural solutions that encourage optimum use of natural lighting. Regionally, expectations have been optimistic in the United States, Asia and the Middle East, while in Europe indications are for a moderate growth, depending on investments and policies that bear up both the technological modernization of plants and the use of recycled material. Conversely, the construction segment in China is likely to demand greater use of recycled metal. As for the energy sector, a recent study by the World Bank assessing the role of metals in a low-carbon future provides for greater use of renewable sources such as wind and solar energy, in addition to the escalated use of batteries, which will result in larger intensity of metal use, including aluminum. 1.3. Production: China’s growing dominance in the global offer The data of the International Aluminum Institute (IAI) has shown that from January 1999 to July 2015, China’s production grew 14 times, achieving 2.7 million tons on an annual basis. In year 2000, Chinese production accounted for 10% of the global production and, nowadays, it has reached 55%. 1.4. Middle East expands capacity The Middle East has consolidated its position as a global producer of primary aluminum, jumping from 1.2 million tons in 2000 to 5.5 million tons in 2016, thus corresponding to an average growth rate of 10% per year. Such a substantial rise in production has been driven by the countries of the Gulf Cooperation Council (GCC), comprising Saudi Arabia, the United Arab Emirates, Qatar, Bahrain and Oman. In 2015, of the ten largest primary aluminum production plants in the world, five were located in the Middle East, particularly in the UAE, with a production capacity ranging from 585,000 to 960,000 tons of aluminum per year. The widespread availability and competitive cost of energy coupled with government policies adding value to the aluminum chain have been key factors in the unprecedented growth of the Gulf countries in the global context of the industry. However, it is worth noting that projections have shown that the annual production growth rate in the Middle East will tend to slow down, as the maturity stage of more significant capacity expansion projects is reached. Also noteworthy is that given the thermal sources and non-renewable resources in use, the carbon footprint of the aluminum produced in those regions exceeds the world average, while in China it is around four to five times higher than in Brazil. The global demand for aluminum will remain promising, not only boosted by the conventional applications related to growth and infrastructure, but also and everyday more by its enlarged use in markets valuing low-carbon footprint.