The aluminum market is benefiting from increased substitution out of copper and steel-based products in the wake of soaring prices, according to Richard B. Evans of Alcan Inc., Montreal. In the past few years and especially more recently, aluminum has benefited at the expense of steel and copper as those metals experienced enormous price jumps. The cable business is faring well as manufacturers substitute out of copper into aluminum. There also has been substitution into aluminum for cans in Europe, away from steel, and aluminum penetration rates also are beginning to pick up in the automotive industry again despite an overall slowdown in the sector.

Slowdowns in the U.S. auto and construction markets have been balanced by demand from China. Currently, China is where the growth is. China’s 7.4-kilogram-per-capita aluminum use compares with between 20 and 30 kg for most Western nations.

American Metal Market. November 30, 2006