The aluminum industry plays a critical role in various sectors including transportation, building & construction, electrical engineering, consumer goods production, foil & packaging, machinery & equipment and many others. By some estimations, the global aluminum market is projected to grow from roughly $169 billion in 2022 to almost $256 billion by 2029, at a CAGR of 6.1% in the forecast period.

Current economic cooldown shouldn’t be a barrier for increased global demand for aluminum. Two major sectors, the transport, which accounts for almost a third of the global aluminum market share, and construction, are the two main drivers for the aluminum market. Another major growth factor is machinery demand, which has been growing in the aftermath of COVID-19 as industrial activities picked up.

Some of the factors driving the demand for aluminum are the implementation of strict greenhouse gas (GHG) and carbon emission requirements, increase in focus on the use of lightweight aluminum for the fabrication of vehicle durable components, and low hazardous emission.

Here are some key possibilities and risks emerging from the growing demand for aluminum worldwide.

Possibilities:

Growing demand: Demand for aluminum is expected to increase due to its lightness, recyclability and its use in sectors such as electric vehicles, renewable energy infrastructure and lightweight building materials.

Sustainability Focus: Aluminum's recyclability and low carbon footprint make it attractive to industries looking for sustainable solutions, making it attractive to companies and investors looking for sustainability.

Technological advances: Continuous research and development is aimed at improving the properties and applications of aluminum, opening the door to new opportunities in various industries.

Risks:

Price Volatility: The aluminum market is subject to price fluctuations, which are affected by factors such as global economic conditions, supply and demand dynamics, energy costs and geopolitical events.

Raw material availability: Aluminum production is dependent on the availability and cost of raw materials such as bauxite and alumina. Any disruptions or price fluctuations in these markets could affect the profitability of aluminum companies.

Regulatory and trade policy: Changes in regulations and trade policy, including tariffs and export restrictions, could affect the global aluminum market, which could lead to problems for companies operating in this sector.

As the market is being shaped by these possibilities and possible risks, its future is ultimately dependent on whether it could satisfy the increased focus on sustainability and the transition to a low-carbon economy.  Demand for aluminum is expected to continue to grow as industries seek lightweight and energy efficient materials, especially fir the global infrastructure development projects in emerging markets, and the market could see significant growth if it succeeds in technological innovation.