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Aluminum demand from beverage, auto expected to grow: panel

Highlights

US aluminum can shipments up 6.2% y-o-y in 2020

Sustainability, at-home consumption driving trend

EVs seen as growth opportunity for die casters

Pittsburgh — Aluminum demand in the US expected to continue growing in the coming years as consumer preferences and sustainability efforts lead to more adoption of aluminum in the beverage and automotive sectors, a panel of industry experts said Feb. 10 during the S&P Global Platts Aluminum Virtual Symposium.

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Despite fluctuating customer demand in 2020 as a result of the coronavirus pandemic, Roxana Molina, senior vice president and chief procurement officer for Novelis, said the company continued its planned capital investments to support beverage can manufacturing and automotive finishing lines globally as both are critical growth areas for aluminum.

Can-makers are already having difficulty filling increased demand driven by more at-home consumption and the desire for more sustainable beverage packaging, she said.

Scott Breen, vice president of sustainability for the Can Manufacturers Institute, said that between 2019 and 2020 the US saw a 6.2% increase in aluminum can shipments, not including the roughly 10 million beverage cans that were imported during the year to meet demand.

While the coronavirus has increased at-home consumption for beer and led to more canning among craft brewer that may have been reliant on a draft system, there's also bee a large uptick in wine, ready to drink cocktails and kombucha in aluminum packaging, Breen said.

He said he expects the growth in aluminum can demand to continue to grow as more customers want less plastic packaging. He noted that the average aluminum can contains 73% recycled content and unlike glass or plastic it is not downcycled into other products but can again be used to make cans.

Auto shifts in aluminum

At the same time sustainable packaging demand is picking up, greater aluminum demand in automotive is being driven by light-weighting efforts and emissions standards, said Paul Brancaleon, director of research, education and technology for the North American Die Casting Association.

"We're going to see more aluminum because the fuel economy has to improve on these vehicles," he said. "As we see that higher aluminum content, we're going to see body parts, bumper parts and closures... [body parts] well be a large growth area from 2020 all the way through 2028."

As automakers look to shed weight and reduce the number of separate components in a vehicle, demand among die casters is expected to increase, he said.

"When you combine all of these components into single, die cast products you're eliminating the need for additional assembly, additional floor space and you're still maintaining the dignity of the product," he said.

The US still lags Europe in terms of market size and penetration for electric vehicles, however, the North American market is developing rapidly, Brancaleon said. To be able to meet the growing automotive demand, suppliers will have to invest in machines large enough to cast those components, he said.

"The supply base is growing, but there is still a lot of investment that needs to be added," he said.