Author

Matthew Abrams
Aluminium Beverage Can Sheet

Global inflation and slow recovery in China shifts forecasts lower.

The last nine months have been challenging after the demand boom of the pandemic period. Trade flows and supply chains are adjusting to the macroeconomic-induced slowdown which affects both near and long-term growth. With macro concerns hindering demand, an over-bought market in 2022 H2 lingered into 2023 H1; demographics and new launches still ring positive through the forecast period.

Global can consumption dropped in 2022 sending ripples through the forecast period

Can production adjusted lower due to near term headwinds

China has been adjusted lower due to a slower than expected restart following their zero Covid-19 policies. Exports are being challenged in two directions with exports of empty cans to North America ceasing and exported can stock volumes slowing due to softening demand. These near-term issues will have long lasting affects as long term consumption forecast is lowered significantly.


North America can production has been adjusted lower due to weakness in 2022 Q4 which caused inventories to build. This inventory build is still an issue for the supply chain and the fallout has tempered demand expectations for the rest of the forecast period.

Growth expectations for Asia ex China have also been hampered by macroeconomic challenges and continued high inflation in those countries. The return to travel for countries such as Korea, Thailand, and Vietnam is the largest upside risk to this forecast. Europe had felt the economic pains of inflation earlier due to proximity to the war in Ukraine. The outlook has yet to improve but the region sees no further reductions in this report.

Near term utilisation revised down in 2023 Q2

Global can sheet utilisation versus production

Slack demand had persisted through 2023 H1 and netting lower global production volumes y/y. The five-year run of y/y demand growth has ended but is expected to resume in 2024.

The inventory build was expected to be worked through in 2023 H1 with May mill shipments of can sheet returning to average demand levels.

Lead time recovery, on-time delivery performance and a return to planned maintenance scheduling are welcome byproducts to the slower pace of demand. All core characteristics were sacrificed to the hyper demand that peaked in 2022 Q2.

Scrap supply will need to grow to feed to the new capacity coming online in the region

North American UBC Requirements

UBC requirements are on track to grow 83% over the next six years in North America. This will put pressure on all parts of the supply chain, including state governments, to look at ways to increase recovery rates.

While UBCs are an important piece, it will be important to examine the scrap market as a whole as other forms (mixed low copper clips and segregated 3xxx and 5xxx alloys) are all desirable feedstock for can sheet.

UBC pricing has historically correlated well with shipments from domestic producers however recently there is more volatile due to supply chain issues (Mg price). As conditions tighten scrap spreads will adjust as well.

After expanding rapidly amidst Covid-19, can maker investments will slow in 2023

Capacity growth will be slower now that demand has come back down to earth

Future growth trends centred in China and Australasia

The secular growth trends that started in 2018, combined with the at home consumption trend throughout the pandemic, helped to boost can consumption which spurred on investments globally.

The three-year CAGR from 2023 will fall to just under 1.5% from 5.15% the preceding three years. China and Australasia will lead growth as other major regions will slow significantly.

Exports of cans from China and UAE boosted production temporarily

Container imports into the US capture empty can trade flow trends

The importing of empty cans into the US was always an inefficient solution and now that demand has slowed to more sustainable levels, it has come to an end.This creates a headwind for can stock consumption in China and the UAE which were the two major production sources for these empty cans exported to the US.

This trend is over as a result of overshooting demand in 2022, the resulting inventory build 2022 H2 and cooling demand. The strategic NA supply gap has been addressed by the greenfield investments made in 2022 Q2-Q3.

Consumption per capita growth trend highlights positive outlook

Global can stock consumption per capita trends

Global macroeconomic headwinds have pushed demand lower in the near term and slightly hampered long term growth expectations. This is a reflection of weak beverage consumption trends in the face of higher pricing.

The outlook for aluminium cans remains positive throughout the forecast period as cans continue to gain share due to shifting ESG standards and other secular growth trends.

North America leads will lead the way, climbing from 4.8 tonnes per 1,000 people to 5.4 tonnes per 1,000 people. Europe follows as it rises from 2.4 to 3 tonnes per 1,000 people. Both are well ahead of the global trend line which is expected to hit 1.3 tonnes per 1,000 people.