Aluminium

From beer and soft drink cans to aeroplane bodies and electrical wiring, aluminium has numerous industrial applications. The properties that make aluminium so important for the commodity market are:

1. Aluminium does not rust; it can last longer than iron even in high moisture zone.
2. Weighs nearly one-third of steel.
3. It can be easily recycled. Nearly 75% of all aluminium produced originally is still in circulation.
4. Aluminium is the third most abundant mineral in the earth’s crust.
5. It is highly ductile and has high heat resistance.

Aluminium future contracts are traded on major commodity exchanges, including the London Metal Exchange (LME), New York’s COMEX and the Shanghai Future Exchange. Aluminium future’s contract size is of usually five tonnes.

LME is the world’s largest exchange for trading aluminium future contracts. In terms of trading, aluminium is the world’s largest commodity on the LME and accounts for nearly one-third of all contracts of the exchange.

The exchange acts as a platform for over 700 distinct specialised metal warehouses in 14 different countries and trades more than 100 aluminium brands from top producers.

The journey of aluminium begins with the mining of bauxite. Bauxite is the commercial ore for aluminium and normally contains 15%-25% of aluminium.

Contemporary aluminium production involves a hydrometallurgical refining method for producing alumina, followed by the electrolysis of this mineral. The method or process was created in 1886 and is still in use. The Bayer method is used by around 90% of alumina refineries worldwide to refine bauxite ore.

Aluminium is produced by refining alumina during the smelting process. In alumina, the aluminium atom is linked to oxygen. Electrolysis is used to break these bonds.

Australia, a global leader in bauxite mining, was the second largest producer of alumina in 2021, as per the Australian government’s Resources and Energy Quarterly report released in June 2022.

Australia exported 18 million tonnes of alumina in 2021, which is the highest in the world. The country is well endowed with bauxite, which is mostly mined through open-cut mines located in Queensland, Gove in the NT, and the Darling Range in WA. The NSW region is also known to hold some bauxite resources.

During FY2021-22, Australia produced 102.6Mt of bauxite. Based on the data in the Resources and Energy Quarterly for June 2022, Australia processed and produced 20.364Mt of alumina and the primary aluminium production during the period was 1.565Mt.