Aluminium foil gets a specific mention in China’s ‘Work Plan for Steady Growth of [the] Non-ferrous Metals Industry’, which was published in late August, and market participants told Fastmarkets that its increased use in food packaging would help China reduce its carbon emissions because of the ever-growing market for food delivery services and prepared foods.
China produced around 5 million tonnes of aluminium foil in 2022, with nearly half of that – 2.45 million tonnes – used in food packaging.
Green aluminium growing demand
China’s total output of aluminium is around 40 million tonnes per year, sources said, and while foil only accounts for a small proportion of that total, they added that because it is widely used in everyday life, aluminium food packaging will continue to be a growing sector and should not be neglected.
“This is the first time that an official document has specifically mentioned the promotion of aluminium food packaging [and] indicates [that the] packaging sector is an important growth [area] for aluminium consumption,” a trader said.
A second trader told Fastmarkets: “[China’s] promotion of aluminium foil food-packaging products is [part of its] efforts to protect the environment and the use of secondary aluminium products can help to reduce resource consumption and carbon emissions.”
Sources said the increased use of aluminium packaging would help to reduce the amount of plastics used, thereby reducing pollution because aluminium foil is potentially 100% recyclable (if cleaned).
“By using more secondary aluminium, we will depend less on ores,” a third trader said. “Producing aluminium products from scrap consumes much less power – probably only 5% of the energy used in producing primary aluminium – with lower carbon emissions.”
The first trader said: “I would expect growing volumes of aluminium to be consumed in this industry, given that people will use those products every day and are willing to go green.”
Global demand for green aluminium is gathering pace, particularly in Europe, with market participants increasingly willing to pay a premium for greener products.
Fastmarkets research analyst Andy Farida said: “Global demand for green aluminium is gathering pace, particularly in Europe, with market participants increasingly willing to pay a premium for greener products.”
Fastmarkets’ aluminium low-carbon differential P1020A, Europe, was most recently assessed at $25-40 per tonne on September 1.
