According to incomplete statistics. In 2019 the global consumption of industrial aluminum has exceeded 80 million tons. This huge market is filled with countless entrepreneurs and workers.
Let’s Find out how profitable the industry of extruded aluminum really is today!
1. Continuously strong demand for aluminum profiles, broad space for aluminum substitution
Due to the light weight of aluminum and aluminum alloy, easy to process into various shapes, downstream industries continue to increase its demand, which has a huge substitution space in many areas. In the field of construction. “saving wood with aluminum”: aluminum alloy door frames and curtain walls have been widely used in the construction industry, saving a lot of wood resources. Aluminum instead of steel” in the field of transportation: the supporting facilities of rail transit and high-speed railroads have generally used aluminum products instead of steel, and the demand for aluminum profiles is increasing.
In emerging fields, the application space of aluminum profiles is also very broad. In the automotive lightweight, new energy vehicle production increases and the development of traditional automotive “lightweight” trend makes the demand for automotive aluminum alloy increased significantly. In the new energy industry and consumer electronics industry, the penetration rate of aluminum alloy materials is also increasing.
2. Aluminum extrusion industry has a low degree of concentration and fierce competition.
The number of enterprises in the aluminum extrusion industry is large and small, and the market concentration is not high. Affected by the scale limitation and service radius, most enterprises lack high-end competitive ability such as customer service and brand operation, and usually do not pay attention to R & D investment and technological upgrading, resulting in the low-end characteristics of the product is more obvious, and therefore tend to compete through the low-price strategy. In the low-end market within the aluminum extrusion of low profits, there is a price war risk.
3. Limited financing channels for enterprises
The industry has high technical requirements, fast equipment renewal, the industry enterprises need to continue to invest funds for technological innovation and production line upgrading. However, most of the enterprises in the industry are small and medium-sized enterprises, the scale is generally small, resulting in widespread financing difficulties and high financing costs, which to a certain extent limits the investment in personnel training and technological research and development, so that the growth of aluminum extrusion profitability is low.
4. Customer barriers
Aluminum extrusion products have significant customization characteristics, mainly used in construction / industry / rail transportation / photovoltaic equipment / construction machinery and other fields. In the market for the above fields, international buyers will conduct a longer period of investigation on the technical development ability, product precision, quality stability, scale supply ability, after-sales service response and other aspects before determining the supplier. So the supplier replacement cost is high, once the aluminum extruder enters the customer’s supplier system, it usually establishes a long-term and stable cooperative relationship with the customer. Obtain stable profits.
In summary
The profit margin of aluminum extrusion is relatively small, but it has a stable profit cycle. There are certain barriers. Although the aluminum extrusion industry faces the difficulties of low industry concentration, fierce competition and difficult financing. But its market demand is increasing and the high degree of customer adhesion makes it still exist profit space. It is believed that in the future, with the technological update of aluminum extrusion, the decline in manufacturing costs can further improve profits.
Hugh Aluminum is an aluminum extrusion manufacturer based in China. We manufacture extruded aluminum products including aluminum roofings，aluminum heat sink aluminum T-slot profile, aluminum deck, aluminum fence, aluminum doors and windows, solar aluminum frame. We offer large quantity of aluminum building materials and factory price
