Are Declining Soda Sales Impacting The Aluminum Can Market?
As health conscious North Americans trade in their sugary beverages for bottled water and healthier substitutes, those working in the aluminum can market are starting to wonder how this trend may affect aluminum prices.
It has recently come to light that large scale health campaigns, which aim to cut down on sugar intake by banning sugary drinks from schools and cutting out junk food ads on select TV channels, may be causing a shift in consumer habits. This shift may have a direct correlation to a decline in the aluminum can market in North America, meaning a slowdown in can production.
Despite soft drinks still being the largest beverage category, in both volume and per capita consumption, large companies are reporting a decrease in annual market share and drops in its volume in the last few years. This includes diet soft drink consumption which has also declined in each of the past six years, including a 3.4% decrease in 2012 and a 2.5% drop in 2011. Earlier this month, Fox Business reported that the Beverage Digest had revealed that the average American drinks roughly 165 liters of soda yearly down from a staggering 204 liters in 1998.
Metal prices in the U.S. have been in decline in recent times. In figure 1, this is reflected in aluminum settlement prices, which are lower now than there were back at the end of January 2012.
A downturn in aluminum can production can only contribute to a decline in these prices. Currently the aluminum can market in the U.S. and Canada combined accounts for roughly around 1.7 million metric tons or 5% of the global annual aluminum consumption. In a recent study by the Can Manufacturers Institution the amount of non-alcoholic aluminum cans that have been shipped has declined by 1.7% from 2011 to 2012 and 1.9% the year before that.
Not is all lost however for the aluminum can market. As the soft drink market in North America starts to flat line as the market reaches maturity, large beverage production companies are now looking to grow their portion of the market share by targeting and expanding their reach into other large soda consuming regions of the world.
Like the soda production companies, aluminum can production companies are also looking to increase sales by investing and following suit into emerging markets overseas, particularly in Asia.
Large aluminum companies like Alcoa are predicting that aluminum can consumption will increase by 2-3% in Europe this year and 8-12% in China. Three major aluminum can manufactures including Ball Corp, Alcoa and Novelis are in the process of opening up new plants in markets such as Vietnam, China, Brazil, Italy and Korea.
To get more information on pricing data and to analyze trends in the aluminum market- use the ZEMA Suite, an end-to-end enterprise data management solution for energy, commodities, and financial market data.https://blog.ze.com/our-industry-views/are-declining-soda-sales-effecting-the-aluminum-can-market/https://blog.ze.com/wp-content/uploads/2013/08/Aluminum-Can.jpghttps://blog.ze.com/wp-content/uploads/2013/08/Aluminum-Can-150x150.jpgIndustry ViewsAs health conscious North Americans trade in their sugary beverages for bottled water and healthier substitutes, those working in the aluminum can market are starting to wonder how this trend may affect aluminum prices. It has recently come to light that large scale health campaigns, which aim to cut down...Cara GibsonCara Gibsoncara.email@example.comContributorBlogs by data management Experts & Analysts | ZE