Aluminium

Special Commodity Report

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Introduction

Aluminium is derived from the Latin word ALUMEN for ALUM (Potassium aluminium sulphate). In
1761 French Chemist Louis-Bernard Guyton de Morveau proposed that ALUMINE for the base
material of ALUM. De Morveau was instrumental in setting up a standardized system for
chemical nomenclature and often collaborated with Antoine Lavoisier, who in 1787, suggested
that ALUMINE was the oxide of a previously undiscovered metal.

In 1808, Sir Humphrey Davy proposed the name ALUMIUM for the metal. This rather unwieldy
name was soon replaced by ALUMINUM and later the word ALUMINIUM was adopted by the
‘International union of pure & applied chemists’ in order to conform with the "ium" ending of
most elements. By the mid-1800s both spellings were in use.

Aluminium is the third most abundant element in the Earth's crust and constitutes about 8% by
mass. In nature however it only exists in very stable combinations with other materials
(particularly as silicates and oxides) and it was not until 1808 that its existence was first
established. It took many years of painstaking research to "unlock" the metal from its ore and
many more to produce a viable, commercial production process.

Aluminium ore, most commonly bauxite, is plentiful and occurs mainly in tropical and sub-tropical
areas – Africa, West Indies, South America and Australia. There are also some deposits in
Europe.

Bauxite is refined into aluminium oxide trihydrate (alumina) and then electrolytically reduced into
metallic aluminium. Primary aluminium production facilities are located all over the world, often in
areas where there are abundant supplies of inexpensive energy, such as hydro- electric power.

Aluminium has only been produced commercially for 146 years and is still a very young metal.
Mankind has been using copper, lead and tin for thousands of years and yet today more
aluminium is produced than all other non-ferrous metals combined. Annual primary production in
1999 was about 24 million tonnes and secondary - recycled - production to some 7 million tonnes.
The total of some 31 million tonnes compares with 14.1 million tonnes of copper, 6.0 million
tonnes of lead and 0.2 million tonnes of tin.

Properties

• Aluminum is light. Its density is only one third that of steel.

• Aluminum is resistant to weather, common atmospheric gases and a wide range of
liquids.
• Aluminum can be used in contact with a wide range of foodstuffs.
• Aluminum has a high reflectivity, and therefore finds more decorative uses.
• Aluminum alloys can equal or even exceed the strength of normal construction steel.
• Aluminum has high elasticity, which is an advantage in structures under shock loads.
• Aluminum keeps its toughness down to very low temperatures, without becoming brittle
like carbon steels.
• Aluminum is easily worked and formed. It can be rolled to very thin foil.
• Aluminum conducts electricity and heat nearly as well as copper.

Though light in weight, commercially pure aluminum has a tensile strength of about 13,000 psi.
Cold working the metal approximately doubles its strength. In other attempts to increase strength,
aluminum is alloyed with elements such as manganese, silicon, copper, magnesium, or zinc. The
alloys can also be strengthened by cold working. Some alloys are further strengthened and
hardened by heat treatments. At subzero temperatures, aluminum is stronger than at room
temperature and is no less ductile. Most aluminum alloys lose strength at elevated temperatures,
although some retain significant strength to 500°F.

Besides a high strength-to-weight ratio and good formability, aluminum also possesses its own
anticorrosion mechanism. When exposed to air, aluminum does not oxidize progressively
because a hard, microscopic oxide coating forms on the surface and seals the metal from the
environment. The tight chemical oxide bond is the reason that aluminum is not found in nature; it
exists only as a compound.

The physical properties of Aluminium are tabled below

Density / Specific Gravity (g.cm-3 at 20 °C) 2.70

Melting Point (°C) 660
Specific heat at 100 °C, cal.g-1K-1 (Jkg-1K-1) 0.2241 (938)

Latent heat of fusion, cal.g-1 (kJ.kg-1) 94.7 (397.0)

Electrical conductivity at 20°C 64.94
(% of international annealed copper standard)
Thermal conductivity (cal.sec-1cm-1K-1) 0.5

Thermal emmisivity at 100°F (%) 3.0

Reflectivity for light, tungsten filament (%) 90.0

These properties can be very significantly altered with the addition of small amounts of alloying
materials. Aluminium reacts with oxygen to form a microscopic (0.000000635cm) protective film
of oxide, which prevents corrosion.

Aluminium in massive form is non-flammable. Finely divided particles will burn. Carbon monoxide
or dioxide, aluminum oxide and water will be emitted. This is a useful property for making rocket
fuel.

Various forms of Aluminium

Aluminum and its alloys, numbering in the hundreds, are available in all common commercial
forms. Aluminum-alloy sheet can be formed, drawn, stamped, or spun. Many wrought or cast
aluminum alloys can be welded, brazed, or soldered, and aluminum surfaces readily accept a
wide variety of finishes, both mechanical and chemical. Because of their high electrical
conductivity, aluminum alloys are used as electrical conductors. Aluminum reflects radiant energy
throughout the entire spectrum, is non-sparking, and nonmagnetic.

Wrought aluminum: A four-digit number that corresponds to a specific alloying element

combination usually designates wrought aluminum alloys. This number is followed by a temper
designation that identifies thermal and mechanical treatments.

To develop strength, heat-treatable wrought alloys are solution heat treated, then quenched and
precipitation hardened. Solution heat treatment consists of heating the metal, holding at
temperature to bring the hardening constituents into solution, then cooling to retain those
constituents in solution. Precipitation hardening after solution heat treatment increases strength
and hardness of these alloys.
While some alloys age at room temperature, others require precipitation heat treatment at an
elevated temperature (artificial aging) for optimum properties. However, distortion and
dimensional changes during natural or artificial aging can be significant. In addition, distortion and
residual stresses can be introduced during quenching from the solution heat-treatment cycle.
These induced changes can be removed by deforming the metal (for example, stretching).

Wrought aluminum alloys are also strengthened by cold working. The high-strength alloys --
either heat treatable or not -- work harden more rapidly than the lower-strength, softer alloys and
so may require annealing after cold working. Because hot forming does not always work harden
aluminum alloys, this method is used to avoid annealing and straightening operations; however,
hot forming fully heat-treated materials is difficult. Generally, aluminum formability increases with
temperature.

Recently developed aluminum alloys can provide nearly custom-engineered strength, fracture
toughness, fatigue resistance, and corrosion resistance for aircraft forgings and other critical
components. The rapid-solidification process is the basis for these new alloy systems, called
wrought P/M alloys. The term wrought P/M is used to distinguish this technology from
conventional press-and-sinter P/M technology. Grades 7090 and 7091 are the first commercially
available wrought P/M aluminum alloys. These alloys can be handled like conventional aluminum
alloys on existing aluminum-fabrication facilities.

Other significant new materials are the aluminum-lithium alloys. These lightweight metals are as
strong as alloys now in use and can be fabricated on existing metalworking equipment. Although
impressive structural weight reductions (from 7 to 10%) are possible through direct substitution,
even greater reduction (up to 15%) can be realized by developing fully optimized alloys for new
designs. Such alloys would be specifically tailored to provide property combinations not presently
available. Producing an alloy that will provide these combinations is the object of second and
third-generation low-density alloy development efforts.

Operating economy is still an important consideration in vehicle design despite fluctuating fuel
prices. Downsizing to save fuel has reached its practical limits; now, reducing the weight of
individual components is taking over. One significant change being implemented by designers of
automobiles and military vehicles today is converting drive shafts, radiators, cylinder heads,
suspension members, and other structural components to aluminum.

Cast aluminum: Aluminum can be cast by all common casting processes. Aluminum casting
alloys are identified with a unified, four-digit (xxx.x) system. The first digit indicates the major
alloying element. For instance, 100 series is reserved for 99% pure aluminum with no major
alloying element used. The second and third digits in the 100 series indicate the precise minimum
aluminum content. For example, 165.0 has a 99.65% minimum aluminum content. The 200-900
series designate various aluminum alloys, with the second two digits assigned to new alloys as
they are registered. The fourth digit indicates the product form. Castings are designated 0; ingots
are designed 1 or 2.

Letter prefixes before the numerical designation indicate special control of one or more elements
or a modification of the original alloy. Prefix X designates an experimental composition. The
material may retain the experimental designation up to five years. Limits for the experimental
alloy may be changed by the registrant.

Commercial casting alloys include heat-treatable and non-heat-treatable compositions. Alloys that
are heat treated carry the temper designations 0, T4, T5, T6, and T7. Die castings are not usually
solution heat treated because the temperature can cause blistering.
Permanent Molding: Permanent mold (sometimes referred to as gravity die casting in Europe) a
metal mold consisting of two or more parts is repeatedly used for mass production of castings.
The molten metal enters the cavity by gravity. Metal cores are used in simple applications. Sand
or plaster cores are used for more complex coring requirements. When using sand or plaster
cores, the process is called semi-permanent mold.

Permanent mold casting is suited for high volume, uniform wall thickness castings. Castings
manufactured with the permanent mold casting process exhibit good surface finish, and
dimensional accuracy. Initial tooling cost is high and there are some limitations on part
complexity.

A production method for pouring permanent mold castings is tilt-pour. In this operation, the
pouring basin is filled with molten metal when the mold is in the horizontal position. The mold tilts
upward allowing the metal to fill the cavity. This method reduces the turbulence that is created
when metal is poured down a vertical sprue.

A variation of the permanent mold process is low-pressure permanent mold (LPPM) where the
metal is introduced by applying air or inert gas pressure to an air-tight chamber that is housing
the molten metal.

Die casting process: Die-casting is a process in which molten metal is injected at high velocity
and pressure into a mold (die) cavity made of high-quality steel. Gate velocities of 90 to 180 ft/sec
(23 to 46m/sec) and pressures of 5 to 10 ksi (35 to 69 Mpa) give the process its distinct
characteristic. Die temperature is maintained at a level 300 to 500°F (150 to 260°C) below the
solidification temperature (solidus point) of the incoming metal in order to freeze (solidify) the
casting as quickly as possible. Under proper conditions the metal does not solidify before the
cavity is filled.

Castings manufactured from the die-casting process typically exhibit an extremely smooth
surface finish. Die-castings cool quickly, and exhibit superior mechanical behavior. Die castings
have excellent dimensional accuracy. Die castings can be mass produced at high volumes. Both
intricate shape and thin sections can be cast in die castings. Die castings are typically limited to
thin wall applications. Die castings have a higher propensity for entrapped air since the metal is
flowing into the cavity with high velocity and turbulence. Because of the potential for entrapped
air, die castings are normally not heat treated. Heat treating a die casting can cause a blistering
on the surface of the casting. Hydrogen shrinkage is also a concern in the production of die
castings. Since the solidification is high due to the rapid cooling of the aluminum in contact with
the die wall, progressive solidification can take place, trapping hydrogen (shrinkage). Initial
investment for die castings are very high, primarily the cost for the tooling die used in the casting
process. The two primary variations of the die-casting process are the hot and cold chamber
processes.

VRC/PRC casting process: The Vacuum Riserless Casting (VRC)/Pressure Riserless Casting
(PRC) process was developed by Alcoa and reengineered by CMI for mass production of
automotive chassis and suspension components. This unique process is, in reality, a variation on
the low pressure process, but one that has several distinct refinements specific to high integrity
aluminum parts.

In VRC/PRC, a mold is positioned over a hermetically sealed furnace and the casting cavity is
connected to the melt by riser tubes(s). Melt is drawn into the mold cavity by vacuum; vacuum
also removes air or other contaminating atmosphere from the cavity ahead of the rising metal. A
unique method is employed to keep a constant melt level in the furnace, avoiding back-surges
such as are sometimes experienced in the more traditional low pressure system.
Multiple fill tubes (stalks) provide ideal metal distribution in the mold cavity. Multiple fill points
combined with close coupling between the mold and melt surface allows lower metal
temperatures, minimizes hydrogen and oxide contamination and provides maximum feeding of
shrinkage-prone areas in the casting. The multiple fill tubes also allow multiple yet independent
cavities in a mold. Carefully sequenced thermal controls quickly solidify castings from extreme
back to fill tubes, which then function as feed risers. Cast-weight to trimmed-weight yield is
exceptional, often exceeding 95%.

Aluminum matrix composites: Metal matrix composites (MMCs) consist of metal alloys
reinforced with fibers, whiskers, particulates, or wires. Alloys of numerous metals (aluminum,
titanium, magnesium and copper) have been used as matrices to date.

Recent MMC developments, however, seem to thrust aluminum into the spotlight. In the NASA
space shuttle, for example, 240 struts are made from aluminum reinforced with boron fibers. Also,
aluminum diesel-engine pistons that have been locally reinforced with ceramic fibers are
eliminating the need for wear-resistant nickel-cast iron inserts in the automotive environment.

Fabrication methods differ for both products. Monolayer tapes in the space shuttle struts are
wrapped around a mandrel and hot isostatically pressed to diffusion bond the layers. For the
pistons, a squeeze-casting process infiltrates liquid metal into a fiber pre- form under pressure.
Other fabrication methods for MMCs include: hot pressing a layer of parallel fibers between foils
to create a monolayer tape; creep and super plastic forming in a die; and spraying metal plasmas
on collimated fibers followed by hot pressing.

Super plastic aluminum: Super plastic forming of metal, a process similar to vacuum forming of
plastic sheet, has been used to form low-strength aluminum into nonstructural parts such as
cash-register housings, luggage compartments for passenger trains, and non load-bearing
aircraft components. New in this area of technology is a super plastic-formable high-strength
aluminum alloy, now available for structural applications and designated 7475-02. Strength of
alloy 7475 is in the range of aerospace alloy 7075, which requires conventional forming
operations. Although initial cost of 7475 is higher, finished part cost is usually lower than that of
7075 because of the savings involved in the simplified design/assembly.
 Production

The aluminium production process can be

categorized into upstream and downstream PRODUCTION FIGURES FOR THE YEAR 2004
activities. The upstream process involves
mining and refining while the downstream
process involves smelting and casting &
fabricating. Downstream-fabricated products
consist of rods, sheets, extrusions and foils.
The world's industry produces around 24
million tonnes of primary aluminium a year.

Most of this metal comes from approximately

120 primary aluminium smelters around the
world, which report their figures to the IAI and
are included in the IAI Statistical system.
These smelters account for over 90% of the
world p.a. production but exclude China, which
produces between two and three million
tonnes per year. There are over a hundred
primary smelters in China, although many are
small.

The leading producing countries include the

AFRICA N. AM
United States, Russia, Canada, the European LATIN AMERICA ASIA
Union, China, Australia, Brazil, Norway, South W. EUROPE E&C
Africa, Venezuela, the Gulf States (Bahrain OCEANIA
and United Arab Emirates), India and New
Zealand; together they represent more than 90
percent of the world primary aluminum
production. The largest aluminum markets are
North America, Europe and East Asia.

North Latin West East/Central Daily

Year Africa America America Asia Europe Europe Oceania Total average
2001 1,369 5,222 1,991 2,234 3,885 3,728 2,122 20,551 56.3
2002 1,372 5,413 2,230 2,261 3,928 3,825 2,170 21,199 58.1
2003 1,428 5,495 2,275 2,475 4,068 3,996 2,198 21,935 60.1
Consumption

In 2003, global aluminium consumption showed a

sharp growth rate of nearly 6%, which was primarily a
factor of the Chinese demand for the metal. China's
consumption continued to register a blistering growth
rate of over 25% in 2003 and the trend has continued
in 2004. Moreover, the indications seem to suggest
that the Chinese demand is not likely to taper in the
near future. Add to this, the improving prospects of
the US and EU economies, and the aluminium
picture looks brighter.

Newer packaging applications and increased usage

in automobiles is expected to keep the international
demand growth for aluminium between 3% & 4% in
the long-term. Asia will continue to be the high
consumption growth area led by China, which has
been and is expected to continue to register double-
digit growth rates in aluminium consumption in 2004.

Markets for Aluminum

Top markets for the industry are transportation, beverage cans, packaging & building
construction. In fact, in 1994, transportation first emerged as the largest market for aluminum, at
about one-quarter of the market, with passenger cars accounting for the vast majority of the
growth. That trend has continued each subsequent year.

Transportation
The aluminum industry's performance is noteworthy, particularly in light of the proliferation of
alternative materials and global competition. Transportation represents the largest market for
aluminum in the United States. Automotive and light truck applications accounted for almost 5.2
billion pounds of aluminum in 2000, or about one fifth of industry shipments. Aluminum intensive
automobiles include the Audi, with its aluminum body, aluminum front and rear axle, and
numerous other aluminum components; the Honda with its aluminum monocoque body and an
aluminum alloy in-line 3 cylinder engine: and the Lincoln, featuring a sheet aluminum hood, deck
lid and front fender, and forged aluminum wheels.
In 2000, transportation accounted for 32.5 percent of all US shipments. That same year aluminum
passed plastic—with average content of 257 lbs per vehicle--to become the third most-used
material in automobiles. Automakers are increasingly choosing aluminum to improve fuel
economy, reduce emissions and enhance vehicle performance.
Packaging
In 2000, containers and packaging ranked second to transportation with 20.4 percent of the
market, thanks to shipments of 4,992 millions of pounds in products such as beverage cans, food
containers, and household & institutional foil. Product producers and consumers are increasingly
using foil because it has numerous applications.

Building & construction

Largely due to products in the residential, industrial, commercial, farm, and highway sectors, the
1999 building and construction market accounted for 3,237 millions of pounds of net shipments,
good for 13.1 percent of total shipments and the third largest domestic market for aluminum.

Indian scenario

India is considered the fifth largest producer of aluminium in the world, following Australia,
Guinea, Brazil and Jamaica. It has huge reserves of high-grade bauxite. It is estimated at about
3037 million tonnes for all categories of bauxite (proved, probable and possible). With the present
level of consumption of aluminum (assuming 1.2 million tonnes of aluminium production with 7
million tonnes of bauxite), the identified reserves would have an estimated life of over 350 years.
India's reserves are estimated to be 7.5 per cent of the total deposits and installed capacity is
about 3 per cent of the world. In terms of demand and supply, the situation is not only self-
sufficient, but it also has export potential on a competitive basis. India's annual export of
aluminium is about 82,000 tonnes. The global consumption of aluminium is estimated to grow at 3
to 4per cent from 2000 to 2007. This provides a market signal for potential growth of Indian
aluminium industry and export of both alumina and aluminium.

About a decade back, the primary Indian aluminium producers were BALCO, NALCO, INDAL,
HINDALCO and MALCO. Of the five, two (BALCO and NALCO) were in the public sector while
the other three were in the private sector.

The shift from the private to the public sector and again from the public sector back to the private
sector has been a notable change in Indian industry. Presently, of the 714,000 TPA installed
capacity in the country for production of primary aluminium, the public sector commands 330,000
TPA (49.21 per cent) and the private sector accounts for 384,000 TPA (53.78per cent.) This
represents a gradual but deterministic shift in the production pattern. Earlier, domestic sale of
aluminium had administrative prices along with distribution controls.

Prospects for the aluminium industry seem to be bright as aluminium is being used increasingly in
energy efficient vehicles. For instance, the space shuttle, the HUMMER vehicle, and the Ferrari
360 Modena all are made of high performance aluminium. Material automakers are increasingly
choosing to improve fuel economy, reduce emission and enhance vehicle performance.

Indian aluminum producers are one of the lowest cost producers in the world. Abundant bauxite
reserves and access to cheap labor have given aluminium manufacturers an edge over their
international peers. Further, with relatively lesser fragmentation in the industry, companies have a
greater control over pricing.

As a result of the process of liberalisation of trade in aluminium, India has emerged as a net
exporter of aluminium, on competitive terms. Government monopoly, in terms of aluminium
production, removal of price and distribution control over aluminium, has been diluted in favour of
private sector. The ownership pattern in private sector has undergone changes. With the takeover
of INDAL by the HINDALCO, it has emerged as the major producer of aluminium in the country. It
could be safe to conclude that Indian aluminium industry is a success story of the reforms,
liberalisation, globalization and privatisation drive in India.
Volatility in domestic prices is lower compared to international prices, as Indian manufacturers
adjust prices only when a clear trend is visible on the LME. However, with reduction in import
duties in Interim Budget '05, the buffer on international prices will reduce leading to stronger
linkage with international markets. Consequently, volatility in domestic markets could increase.