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World Aluminium demand to continue to grow: report

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CANBERRA (Scrap Register): World primary aluminium demand is forecast to grow at an average annual rate of 3.4 per cent in 2020 and 2021, to reach 71 million tonnes by 2021, Australia's Department of Industry, Innovation and Science said in its Resources and Energy Quarterly report.

The gains will be driven by rising demand from the global automotive industry. A significant driver of aluminium demand is expected to come from automobiles, particularly energy efficient vehicles containing an increasing proportion of aluminium components, the report said.

Automakers across the world are working to replace internal combustion engines with electrical engines, and are seeking to reduce vehicles’ weight by increasing the use of aluminium, which is 10 to 40 per cent lighter than steel.

Despite slowing economic growth, the Chinese government’s infrastructure projects and ambitious initiatives for promoting electric vehicle production are expected to bolster demand for aluminium. These initiatives are likely to offset the impacts of trade tensions with the US. China’s aluminium consumption is expected to continue to grow strongly over the next two years, reaching 39 million tonnes in 2020, it said.

Outside of China, the North American market is expected to drive aluminium demand over the forecast period and beyond. The US Administration’s recent decision to lift tariffs on steel and aluminium imports from Canada and Mexico has opened the way for the ratification of the US, Mexico and Canada (USMCA) trade agreement - replacing the North America Free Trade Agreement (NAFTA).

The USMCA is expected to benefit the US automotive and aluminium industries by bringing in extra business (estimated around US$600 million over five years). As new rules of origin come into force that require 75 per cent of auto contents to be produced on the North American continent, it is likely that aluminium consumption will be boosted.

Braidy Industries - a joint-venture aluminium smelter between Rusal and Braidy - has secured a supply agreement that will see it supply BMW German car manufacturer with high quality automotive aluminium alloy sheet metal when the company’s plant commences production in 2021, the report said.

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