Cast down: Smelter closures, low prices and falling demand lead industry revenue to decline

Australia is the world's largest producer of bauxite and a substantial producer of alumina, however the country ranks sixth in global aluminium output, with China the leading producer. Australia is expected to produce 1.6 million tonnes of aluminium in 2018-19, down from 1.8 million tonnes in 2013-14. Industry revenue is expected to decline at an annualised 3.5% over the five years through 2018-19, to total $5.7 billion. This decline primarily reflects smelter closures, but is partly offset by a spike in the global price of aluminium over the two years through 2018-19. Industry revenue is expected to decline by 0.6% in 2018-19.Exports are estimated to account for 69.9% of the Aluminium Smelting industry's revenue in 2018-19, at $4.0 billion...read more.

Industry Statistics & Market Size
Revenue
$6bn
Annual Growth 14-19
-3.5%
Forecast Growth 19-24
Profit
Employment
3,650
Businesses
40

Industry Threats & Opportunities

  • Industry profit has improved due to rising aluminium prices and the exit of unviable operators
  • Declines in global and domestic aluminium prices have contributed to revenue falls
  • The world price of aluminium should decline over the next five years, hindering the industry
  • Industry Report - Industry Investment Chapter

    The Aluminium Smelting industry is highly capital-intensive once a plant is operational. Capital requirements are high to establish an aluminium smelter due to large-scale investment in capital equipment and smelting machinery, rather than upon direct labour inputs. Aluminium smelters cost billions of dollars to construct and even smelter expansions cost hundreds of millions of dollars. For every dollar spent on wage costs, an expected $0.37 will be invested in industry plant and equipment in 2018-19. Capital intensity has increased over the past five years as firms have reduced employment and cut wages in order to improve economic viability...purchase to read more.

    Additional Insights for the Aluminium Smelting Industry

    IBISWorld has determined the most important Key Success Factors for the Aluminium Smelting are:

  • Output is sold under contract - incorporate long-term sales contracts
  • Access to required utility infrastructure
  • Supply contracts in place for key inputs
  • IBISWorld analysts also discuss how external factors such as World price of aluminum and Demand from aluminium door and window manufacturing in the Aluminium Smelting industry impact industry performance..

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    What's in this report

    What is the Aluminium Smelting Industry?

    Industry firms primarily smelt alumina to produce aluminium, reprocess scrap aluminium and cast aluminium metal into basic shapes or to customer specifications. Companies also manufacture aluminium alloys from primary aluminium at the same facility.

    Industry Products
  • Primary aluminium ingots and products
  • Aluminium castings
  • Recycled aluminium ingots and products
  • Industry Activities
  • Smelting aluminium from alumina
  • Secondary recovery of aluminium
  • Aluminium casting
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • World price of aluminum
  • Demand from aluminium door and window manufacturing
  • Electricity service price
  • US dollars per Australian dollar
  • Demand from aluminium rolling, drawing and extruding

  • Current Performance
  • Lower demand and output
  • Global conditions
  • Domestic conditions
  • Exports and employment
  • Global demand
  • Chart: Revenue Growth

  • Industry Outlook
  • Global economic activity
  • Output and export trends
  • Other future factors
  • Table: Aluminium Smelting Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Aluminium Smelting Industry Lifecycle vs The Economy

  • Supply Chains
    Key Buying Industries
  • Aluminium Rolling, Drawing and Extruding
  • Aluminium Door and Window Manufacturing
  • Motor Vehicle Manufacturing

  • Key Selling Industries
  • Alumina Production
  • Fossil Fuel Electricity Generation

  • Products & Services
  • Primary aluminium ingots and products
  • Recycled aluminium ingots and products
  • Aluminium castings
  • Chart: Aluminium Smelting Industry Products and Services Segmentation

  • Demand Determinants
    Major Markets
  • Overseas metal fabricators
  • Domestic building and construction industries
  • Domestic automotive and aviation industries
  • Domestic packaging and container manufacturers
  • Other domestic industries
  • Chart: Major Market Segmentation for the Aluminium Smelting Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
  • Chart: Cost Structure Benchmarking – Sector vs Aluminium Smelting

  • Basis of Competition
    Barriers to Entry
  • Table: Barrier to Entry Checklist for the Aluminium Smelting Industry

  • Industry Globalization
    Rio Tinto Plc - Rio Tinto Limited, Alcoa of Australia Limited,
  • Table: Rio Tinto Plc - Rio Tinto Limited - financial performance
  • Table: Alcoa of Australia Limited - financial performance

  • Capital Intensity
  • Chart: Level of Capital Intensity for the Aluminium Smelting Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

  • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

  • Regulation & Policy
    Industry Assistance
    Table: Industry Data for the Aluminium Smelting Industry
    Includes:
  • Industry Revenue (2010-2024)
  • Industry Gross Product (2010-2024)
  • Establishments (2010-2024)
  • Businesses (2010-2024)
  • Employment (2010-2024)
  • Exports (2010-2024)
  • Imports (2010-2024)
  • Wages (2010-2024)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    Alumina
  • A semi-processed form of aluminium obtained when bauxite is refined.
  • Aluminium
  • A non-ferrous, silvery white metal that is soft and light.
  • Bauxite
  • An aluminium-bearing ore that is processed to make alumina.
  • Ingot
  • A metal piece that has been cast from a mould and can be further processed into intermediate goods or final products.
  • Potline
  • A series of containers, known as pots, in which the alumina is converted to aluminium.
  • Primary Aluminium
  • Aluminium initially produced directly from alumina, and excludes recycled aluminium and alloying additives.
  • What Our Customers Say

    Why buy this report?

    IBISWorld’s Aluminium Smelting market research report is a comprehensive guide to market size and growth prospects. Our industry reports offer strategic industry analysis of the factors influencing companies, including new product developments, economic, lifestyle and demographic influences, distribution and supply chain factors and pricing issues. Full analysis accompanies our data forecasts to illustrate how the market responds to emerging industry trends.

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    This report on Aluminium Smelting:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding of industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Aluminium Smelting market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

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