Four industry drivers define the business context
The aluminium price follows global growth factors such as energy prices and other commodity prices. During the last years the price has increased as a result of higher production costs. China has dramatically increased its consumption and production of aluminium and is expected to be the main contributor to increasing demand for aluminium going forward.
The market for fabricated aluminium products is more fragmented and cyclical than the market for primary aluminium. Knowledge about regional markets, efficient production and product development in close cooperation with customers are critical success factors.
Access to raw materials
Bauxite is the main raw material for aluminium. Bauxite is refined into alumina which is used as input in primary aluminium production. Long-term control over these input factors is critical, either through direct ownership, joint ventures or long-term contracts.
Access to low-cost energy
Energy constitutes nearly 30 percent of the cost in primary aluminium production. Predictable access to low-cost energy is critical and is the main reason new production capacity is built in energy-rich areas such as the Middle East.