Aluminum is a popular and widely-used metal for several industries and markets. Smaller commodities like soda cans, tools, eye glasses, gutters, packaging, and so forth are common aluminum products; whereas, larger ones like airplanes, high-speed trains, cars, trucks, construction equipment, and more make up a huge part of the aluminum market as well. Recently, the price of aluminum has fallen drastically, sparking questions about its changing values. There are several factors, both economic and organic, that influence the price of aluminum and other metals.

Continue reading to learn more about these factors, and why the current value of aluminum might be so low.

Factors that Influence the Price of Metal

Because aluminum metal is used in several industries across the world, its demand is constantly changing. Changes in demand are the root of the rise and fall of aluminum prices. The industries that use the majority of alumina in the world are the ones that influence these prices the most, and for a few different reasons. Here are the industries that use the most alumina, or produce the most aluminum, and the reasons their demand for the metal might fluctuate:

Construction and Building

The construction and architectural industries make up a large part of the demand for aluminum. In most modernized countries, more than 25% of all aluminum produced ends up being used in the construction markets. The demand for aluminum increases as residential, commercial, and industrial construction rates increase. And when demand for aluminum increases, the price for it does as well. When construction markets are at a low production rate, the demand for such metal might decrease, rendering lower prices for aluminum.

Transportation

In almost all developed countries, the transportation market makes up a majority of demand for aluminum. Cars, trains, airplanes, buses, and more are all made with aluminum. Car manufacturers like General Motors, Chrysler, and Ford are using more and more aluminum for car production for lighter cars, compact vehicles, and smaller trucks. Vehicles were once made with primarily steel, but now more than 300 pounds of aluminum can be found in current make and model cars and trucks. Since the use of aluminum in automobile manufacturing is becoming more and more popular, the demand will increase, along with the price.

Energy Prices

The cost of energy can greatly influence the cost of aluminum. The reason for this is that the production of aluminum requires a constant supply of electricity. In fact, more than 25 percent of the cost of producing aluminum is energy usage. If the cost of energy increases, it means the cost of smelting alumina does as well. If the production process for aluminum costs more, then the result would be either an increase in price, or a drop in demand.

Aluminum Recycling Services in Indianapolis

Call Zore’s Recycling at 317-244-0700 for easy aluminum recycling services in Indianapolis, Indiana. We are an experienced metal recycling company that offers the most convenient aluminum recycling services around. We accept all commodities made from aluminum, such as soda cans, food cans, cars, construction equipment, appliances, sheet metal, and much more. Call 317-244-0700 to learn how to earn cash on the spot when you recycle aluminum in Indianapolis, Indiana.