There are good reasons for using aluminium. Mass is the big driver. The list of pluses goes on and on and you could select the benefits of extrusion, ability to produce deep and optimally profiled sections, advances in die casting, advances in metal forming, CNC machining advances, laser and water jet cutting and solid modelling to optimise designs in aluminium as a few. My question is whether if you bet the house on aluminium, could this be a truly bad strategic decision?

Sarum Hydraulics has designed manifold blocks and pump bodies in aluminium for thirty years and ridden the roller coaster on aluminium price. What is the risk in designing more and larger parts in aluminium? Benefits are the chance to simply cut the number of components, hack out mass and use fully the capabilities of CNC machines and tooling. This is the way to go, I feel. We have had big successes. Other than getting decent quality material, cost is the big risk. Remember when the appetite of the aviation industry bumped up the price of 2014A a few years ago and mill lead times were also pushed out?

Could prices double? There are a few considerations. There is an inherent instability in the production, as new capacity to produce the material takes two or three years to come on line. There has probably been the problem of uneven supply and demand with lags in bringing on new supply for some years, causing price changes. Looking on the web suggests that there is a long term price cycle running over two or three decades; it would be interesting to know what forces are in play behind this. I am not clear whether this relates to long lead times in bringing bauxite on stream. What might well have changed for the better as far as consumers are concerned is the number of new entrants into the pool of producers in different parts of the world. Some of these producers are keen to use their surplus power and may see aluminium as a strategic industry. Many are focussed on market share, so may be very keen on prices for years to come. Certainly China, India, Russia and the Middle East are now major producers. More producers in lots of different parts of the world cannot be bad. I also read that there have been technical improvements in smelting aluminium as well, and it would seem logical that new entrants would invest in up-too-date technology.

On the demand side, there is forecasted a steady growth in consumption in the world. If aluminium is being used more widely in, for example, the global car industry, that must be stoking up demand for decades to come. I think there is no doubt that the automotive industry is already a ferocious consumer and I really cannot see this dropping with the hunger for cars from the emerging Middle Classes around the world.

Is there a risk of speculators pushing the price up? I have no idea! I think I would be a cup half full sort of guy and hope that the market is large enough and diverse enough that nobody can corner it.

Discussion welcome, especially from somebody who is paid to know the answer!