Brief Excerpt from Industry Overview Chapter:
Companies in this industry process and manufacture alumina, aluminum and aluminum products. Major companies include US-based Alcoa, along with Aluminum Corporation of China; Hindalco Industries (India); Norsk Hydro (Norway); Rio Tinto (UK and Australia); and RUSAL (Russia).
Demand comes largely from manufacturers of durable goods such as motor vehicles, aircraft, food packaging containers, building and construction, and electrical generators. The profitability of individual companies depends on efficient operations, because aluminum products are commodities sold based on price. Big companies have economies of scale in production. Accordingly, most producers of secondary products buy raw metal from the large producers. Small companies can compete by serving regional markets or producing specialty products. The US industry is highly concentrated: the 50 largest companies generate about 85% of revenue.
PRODUCTS, OPERATIONS & TECHNOLOGY
Major sources of revenue include semi-fabricated products like aluminum sheet, plate, and foil (about 42% of industry revenue); rolled, drawn, and extruded aluminum (28%); secondary smelting and alloying of aluminum (17%), and refining and primary aluminum (13%). Some aluminum producers also make alumina from refined bauxite. Primary aluminum production involves processing alumina into aluminum. Secondary smelting and refining involves recovering aluminum and aluminum alloys from scrap or purchased aluminum. Aluminum is lightweight, weather-resistant, and easily workable and formable, as well as highly conductive for electricity, highly reflective, and safe for use as food packaging -- diverse properties that make the metal a high-demand product.
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