Aluminum Sector Analysis in Brazil

Growing demand for aluminum in Brazil is powered by the packaging, transportation and construction industries. Aluminum foil is used in flexible packaging and many consumer products are making the transition in packaging material, leading to greater demand across the world.  Increases in demand for transportation and construction needs are powered by the 2014 World Cup and the Rio 2016 Summer Olympics, where extrusion-related programs include stadiums and airports. The Brazilian Aluminum Association (ABAL) technical director Arton Filletti says “We also see great potential for extrusions in other modes of people transport, such as railways, urban surface trains and subways.” He also sees potential in the shipping and offshore industry.

Four industries account for three quarters of aluminum consumption in Brazil.
Four industries account for three fourths of aluminum consumption in Brazil: packing, transportation, construction and electricity.

 

Aluminum is on the rise in the auto industry and has plenty of room for growth in Brazil. In 2013, vehicles produced domestically have average aluminum content per vehicle at around 110 pounds. In leading markets such as the U.S. and Europe, average aluminum content per vehicle exceeds 300 pounds. Inovar Auto is a government program established to boost vehicle technology innovation should raise demand by the industry as well as tax breaks for cars that reach a set level of energy efficiency. Demand should increase for aluminum since it is known to make cars lighter and run more efficiently.

Rio de Janeiro's Olympic Park will be located next to the water's edge in the Barra area of the the city and is set to be used in the 2016 Summer Olympics.

Last year, Brazil dropped to 8th from 6th largest producer globally as production of primary aluminum fell 9.2%. The main barrier is poor competitiveness in the cost of electricity. The loss of competitiveness will mean that Brazil will have to become a net importer of aluminum. The People’s Republic of China remains at the top of the list and Shanghai Metal Corporations is a leading manufacturer in Aluminum sheets and plates committed to providing value-added quality products with competitive pricing and prompt delivery. Our group of competent engineers develops and improves our products using specially design and advanced equipment to meet the special needs to our clients. To find out more about our wide variety of products check out our website here.

Brazil 2

Sources: The Brazilian Aluminum Association (ABAL), Bain & Company

Kristie K.//SMC Editor

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