Indonesia Aluminium Market by Product Type (Flat-Rolled, Castings, Extrusions, Forgings, Powder & Paste, Other Types), by Type (Primary and Secondary), by End User Industry (Transport, Consumer Goods, Machinery & Equipment, Construction, Foil and Packaging, Electrical Engineering, Others) – Opportunity Analysis and Industry Forecast 2024–2030

Indonesia Aluminium Market Overview

The Indonesia Aluminium Market size was valued at USD 2.5 billion in 2023 and is predicted to reach USD 4.8 billion by 2030, with a CAGR of 9.2% from 2024 to 2030. The market encompasses the supply and demand dynamics of aluminium, a versatile and lightweight metal extensively used across various industries such as automotive, aerospace, construction, packaging, and electronics. 

Aluminium plays a crucial role in modern manufacturing and infrastructure development as it is characterized by its properties of corrosion resistance, conductivity, and recyclability. The market involves the extraction of bauxite ore, refining into alumina, and smelting alumina to produce aluminium metal. Aluminium’s properties such as strength, corrosion resistance, and conductivity make it essential for modern manufacturing and infrastructure projects. Fluctuations in global trade policies, energy costs, and demand from emerging economies further shape the Indonesia aluminium market, making it a vital component of the industrial landscape.

The Rising Construction Industry Propels the Growth of the Market 

The rising construction industry in Indonesia is a major driver of the aluminium market growth. With substantial investments directed towards building roads, bridges, airports, and other essential infrastructure projects, there is a heightened demand for aluminium, valued for its versatility in construction. This surge in construction activities prompts local aluminium producers to boost their production capacities to meet the growing demand.

According to the data published by the Government of Indonesia, the construction industry accounted for 9.86% of the nation’s Gross Domestic Product in 2023, making it the fifth largest contributor of the national economy. This significant contribution underscores the vital role of the construction industry in driving the growth of the aluminium market in Indonesia.

Growing Automotive Industry in Indonesia Boost the Market Growth

The increasing automotive industry in the region is significantly driving theIndonesia aluminium market growth. As automotive manufacturers seek to produce lighter, more fuel-efficient vehicles, the demand for aluminium, known for its lightweight and high-strength properties continues to rise.

This surge in demand is prompting local aluminium producers to expand their production capacities to meet the needs of the automotive sector. According to the International Organization of Motor Vehicle Manufacturers, the motor vehicle production in Indonesia increased from 890,000 units in 2021 to 1.18 million units in 2023. This increased production capacity positions Indonesia as a competitive player in the global market. 

Environmental Concerns Restrain the Growth of the Market

Environmental concerns significantly restrain the growth of the Indonesia aluminium market by imposing regulatory constraints and increasing production costs. Aluminium production is energy-intensive and leads to substantial greenhouse gas emissions and environmental degradation.

To mitigate these impacts, the industry faces stringent environmental regulations, which require investments in cleaner technologies and compliance measures, thereby raising operational costs. Additionally, heightened environmental awareness among consumers and stakeholders’ pressures companies to adopt sustainable practices, potentially slowing expansion and production activities. These factors collectively hinder the industry's growth and competitiveness in the market.

Integration of Artificial Intelligence to Sort Mixed Aluminium Alloy Scrap Creates Market Opportunities

The integration of Artificial Intelligence (AI) with sort mixed aluminium alloy scrap presents a significant opportunity for the Indonesia aluminium market. Traditionally, sorting aluminium alloy scrap has been a labor-intensive and time-consuming process, requiring significant human resources. 

By employing AI algorithms and machine learning techniques, scrap merchants and smelters in Indonesia will be able to streamline the sorting process of mixed aluminium alloy scrap. These AI systems will quickly and accurately identify different types of aluminium alloys and separate them based on their composition and purity requirements.

This automation will not only reduce the time and labor costs associated with manual sorting but will also improve the overall efficiency of aluminium recycling operations. By ensuring that only high-quality aluminium scrap is used for recycling, AI-enabled sorting systems will contribute to the production of pure aluminium products, meeting the stringent quality standards demanded by various industries. 

Moreover, the adoption of AI in sorting aluminium scrap will enhance the sustainability of the aluminium industry in Indonesia by promoting resource efficiency and reducing waste. By maximizing the utilization of recycled aluminium and minimizing impurities in the manufacturing process, AI-driven sorting technologies will contribute to the circular economy and environmental conservation efforts.

Competitive Landscape

The Indonesia aluminium industry comprises various market players, such as China Hongqiao Group Limited, PT Indonesia Asahan Aluminium (Inalum), PT. Daiki Aluminium Industry Indonesia, PT. ALEXINDO (Aluminium Extrusion Indonesia), PT Alumindo Light Metal Industry Tbk, PT Alakasa Industrindo Tbk, PT Indal Aluminium Industry Tbk, Hindalco Industries Ltd., East Hope Group Company Limited, PT Indoaluminium Intikarsa Industri, and others.

These market players are adopting various strategies including product launches across various regions to maintain their dominance in the Indonesia aluminium market share. By continuously innovating and launching new offerings, they aim to meet the evolving demands of customers and also enables them to capture new opportunities and expand their market reach.

Indonesia Aluminium Market Key Market Segments

By Product Type

• Flat-Rolled

• Castings

• Extrusions

• Forgings

• Powder & Paste

• Other Types

By Type

• Primary

• Secondary

By End User Industry

• Transport

• Consumer Goods

• Machinery & Equipment

• Construction

• Foil and Packaging

• Electrical Engineering

• Other End User Industries

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