Industrial metals are considered to be the building blocks of an economy. Despite concerns of a looming global trade war — due to the recent imposition of tariffs — adding an element of uncertainty to the outlook lately, there are plenty of reasons to be optimistic about the industrial metals industry over the long term.
Here we discuss some of the key reasons and what investors in the industrial metals sector can look forward to in the coming months and years:
Automotive & Aerospace Catalysts for Sustained Growth
On the demand side, aluminum consumption is anticipated to improve on a global basis, spurred on by the automotive and packaging industries — the key end markets. The automobile market is becoming increasingly aluminum-intensive, given the metal’s recyclability and light-weight properties. The global push to improve fuel efficiency in vehicles is projected to more than double the demand for aluminum in the auto industry by 2025.
The airline industry will grow on the back of strength in the commercial segment on higher air travel demand, new aircraft orders and strong order backlog. This in turn will boost demand for the metal.
Growing Construction Activity to Stoke Demand
The housing and construction sector is the largest consumer of steel today and consequently, of iron ore. The construction sector is the second most rapidly growing sector after transportation in terms of aluminum usage. Building construction (pipes and wires) is also the largest market for copper.
