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Commodity
ALUMINIUM
Description | Overview | History | Aluminium producing countries | Indian aluminium market | Major trading centers
Description


Aluminium is a silver to white colored, highly elastic, ductile element having atomic number 13 in the periodic table. It is a light metal with only 1/3rd density as compared to that of steel. It is as good a conductor of heat and electricity as the metal copper is. Aluminium is known for its feature of being resistant to outside weather, atmospheric gases and liquids. Thatís why it is largely used in the cold conditions where it maintains its toughness unlike other metals and gains advantage over the metals carbon-steel and copper etc. Non-toxicity and non-magnetic are some of the other characteristics of this metal.

Aluminiumís abundance in the earthís crust stands third among other elements. But it is not found in the free state anywhere in the world but in combined form with other materials in the ore form.

Overview


Aluminium is a newly discovered metal as compared to the other metals like copper, silver etc as it was found in the 18th and 19th century only. It is the most eco-friendly metal and is also sound technologically and economically. This fact gives aluminium the second place in the list of the largest consumed metals in the world after steel and it is often termed as a versatile metal. It also has unique and numerous properties such as gas resistant, moisture-vapor resistant, grease and oil resistant, corrosion resistant, reflective, lightweight, recyclable etc that makes it stand out when other metals are compared to it. On behalf of all this, it can be said that this metal is IRREPLACEABLE.

Aluminium is extracted from the aluminium ore, most commonly bauxite that is found in the areas lying in the tropical and the sub tropical belt on earth. Aluminium constitutes 8% of the earthís crust. Large deposits of bauxite are located in the continents like North America, South America, Africa, Australia and Asia and small deposits in Europe. The world production of aluminium is around 28.9 million tons, China being the largest producer followed by Russia, Canada and United States. As already mentioned that aluminium stands second in the largest consumed metals in the world, it is also true that the world consumption level has also risen significantly in the last few years. The following are the major aluminium consuming countries

  • United States

  • Japan

  • China

  • Germany

  • France

  • Korea

  • Italy

  • England

  • India

  • Canada

  • Austria

  • Denmark

  • Italy

  • Netherlands

  • Norway

  • Sweden

  • Switzerland

The import Ė export situation of this metal is dependent upon the demand supply mismatch in the world. Consumption in the African continent is much lower than the production level and that states that countries in the African continent have a high exporting ability. The major bauxite exporting countries are

  • Guinea

  • Jamaica

  • Surinam

  • Australia

The major countries that do not have much of the bauxite deposits import the ore to extract aluminium and make finished products out of it are

  • Russia

  • USA

  • Japan

  • Germany

  • Canada

  • Norway

History

The metal aluminium hasnít got a long historical background behind it, as it is relatively a new discovery but the salt of this metal has been used for a long time. In around 5300BC strong pots and bowls were made from the clay consisting large amount of the metal salt in Persia. In around 2000BC, ancient Greeks and Romans made use of the salts of this metal as a dying agent and for the purpose of dressing wounds. At that time the salt was known by the name ĎAlumí. The name of this base salt was changed to ĎAlumineí by a French chemist and politician named Guyton de Morveau in 1761.

It was in 1808 when a chemist and physicist named Humphry Davy found out the presence of metal base in this salt and named the element Aluminium though he was unsuccessful in extracting the actual element. After a few years of experimentation, in 1825, a Danish chemist, Hans Christian Oersted was successful in attaining an impure lump of aluminium metal, which was developed further by Friederick Wohler by mixing aluminium chloride with potassium. With time the process of extraction of aluminium was improved and in 1859, with the help of the emperor Napoleon III, first ever aluminium factory was established. The statue at Piccadilly Circus, London that is known by the name of Eros was one of the first statues that were made by this metal.

Till then the process of extracting aluminium was very expensive and it was a highly prized, considered to be a semi precious metal but in 1886, Hall and Heroult invented a new process of extraction and still the improved version of that process is used commercially throughout the world.

Aluminium producing countries


Aluminium is abundantly present in the earthís crust. The ore of the metal i.e. bauxite generally occurs in the tropical and sub tropical areas of earth and is present in almost all continents except Antarctica with the estimated deposits of 65 billion tons. Production of aluminium from bauxite ore requires three stages i.e. mining of the ore, refining of the ore to produce alumina and finally smelting of alumina into aluminium. To obtain 1 ton of metal, 2 tons of alumina is required and for producing 1 ton of alumina, 2-3 tons of bauxite is required. The only ore other than bauxite that is used for extracting aluminium in some areas is nepheline. The major producers of primary aluminium in the world are

  • United States of America
  • Russia
  • Canada
  • European Union
  • China
  • Australia
  • Brazil
  • Norway
  • South Africa
  • Venezuela
  • Bahrain
  • United Arab Emirates
  • India
  • New Zealand

The global production of aluminium figures around 29 million tons and the above-mentioned countries share more than 90% of the aluminium production. China topped the chart in 2004 producing around 6.1 million tons of metal. Russia with 3.6 million tons, Canada with 2.64 million tons and USA with 2.5 million tons of production followed China.

Production of aluminium in India

India is considered to be the fifth largest producer of Aluminium in the world. It accounts to around 5% of the total deposits and produces about 0.8 million tons of aluminium. It is estimated that if the countryís aluminium consumption rate maintains, itíd be having the reserves for over 350 years. India has confirmed 3 billion tonnes of Bauxite reserves out of the global reserve of 65 billion tonnes. The worldwide alumina production competence is around 58 million tonnes in which India has 2.7 million tonnes. Most of the bauxite mines lie in Bihar, Karnataka and Orissa.

In India, the production of aluminium is highly concentrated and is in the hands of the following four companies

  • Bharat Aluminium Co. Ltd (BALCO)

  • National Aluminium Co. Ltd (NALCO)

  • Hindustan Aluminium Co. Ltd (HINDALCO)

  • Madras Aluminium Co. Ltd (MALCO)

BALCO and NALCO represent the public sector and HINDALCO and MALCO represent the private sector of the country. Earlier a company named INDAL was also indulged in the production of aluminium independently but in year 2000, it was taken over by HINDALCO and now it works as a subsidiary of the parent company.

Indian aluminium market


Indian market for aluminium has expanded since a few years and is directing towards further growth in coming years. Both public and the private sector are indulged in the production of alumina and aluminium. With the change in time, Indian aluminium sector has observed drastic changes. Earlier government played an important role in fixing the regulations in trading of aluminium as it had the monopoly in the production of the metal but currently it has lost its control over the price and distribution due to the emergence of private sector. With the take over of INDAL by HINDALCO in the year 2000, it has emerged to be the largest producer of aluminium in India.

 

Indian production figure for this metal is around 0.8 million tons in a year. That makes it the fifth largest producer of aluminium in the world. India has 5% of the total bauxite deposits in the world that can last for approximately 350 years with the present consumption rate. The consumption of this metal is also on a rising trend with a figure of around 0.618 million tons which is expected to touch 0.78 million tons mark in 2007.

 

In early 1990s when the Indian economy was liberalized, India identified its export potential and emerged out to be a net exporter of Aluminium. Till now it has been an exporter of this metal, though Indian scenario hasnít been a self-dependent one. Indian exports figures hovers around 82000 tons annually and the major importer countries of Indian aluminium are

  • Bangladesh

  • Sri Lanka

  • Egypt

  • Iraq

Main consumer industries of aluminium in India

  • Power

  • Infrastructure

  • Transportation

  • Aviation Industry

  • Construction and packaging

  • Consumer's durables 

Market influencing factors

  • Domestic demand and supply

  • International prices

  • Interference of government and various associations

  • Import duties

  • Other economic activities in the world

  • Price fluctuations of the input materials like power, freight etc

Major trading centers of aluminium


The major trading centers of aluminium in the world are

  • London Metal Exchange (LME)

  • Tokyo Commodity Exchange (TOCOM)

  • Shanghai Futures Exchange (SHFE)

  • New York Mercantile Exchange (NYMEX)

These above mentioned commodity exchanges provide direction to the world aluminium prices.

In India, aluminium is also traded at various commodity exchanges namely Multi Commodity Exchange of India and National Multi Commodity Exchange of India
 
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