Market Trends of Vietnam Aluminum Industry
This section covers the major market trends shaping the Vietnam Aluminum Market according to our research experts:
Growth from the Building and Construction Industry
- Aluminum is the second most widely utilized metal in the building and construction industry. It is widely used in windows, curtain walls, roofing and cladding, solar shade, solar panels, railings, shelves, and other temporary structures due to its lightweight and corrosion resistance.
- Since the COVID-19 era, the Vietnam construction sector was one of the best performing in the Asia-Pacific region. With the tremendous rise of industrial real estate during and after the pandemic, many new investors, including domestic developers, opted to enter the market.
- According to the General Statistics Office of Vietnam, the construction sector significantly contributed to the country's GDP with about 38.26% of the total contribution. Vietnam's GDP growth rate was estimated to be about 8.8% in 2022.
- The Ministry of Construction stated that the country's construction industry achieved a growth rate of about 8.5% during 2022, contributing to bringing the economy's overall growth rate surpassing the 6-6.5% plan set by the Government.
- In its recent publication, the Ministry of Construction of Vietnam also stated that the People's Committee of Ha Long City in Quang Ninh Province commenced construction of a social housing project for nearly 1,000 apartments in Ha Long City's Hong Hai Ward and Cao Thang Ward in the early November of 2022.
- The overall investment in the project is projected to be around VND 1.3 trillion (USD 52.3 million), with completion scheduled for the first quarter of 2026. After completion, the project aims to house more than 3,880 employees and low-income residents.
- According to the ministry, 63 commercial projects were completed in 2022, with nearly 15,000 apartments being constructed in the covered area. Contrarily, there were more unfinished and ongoing commercial housing projects than ever, totaling around 1,102 projects (302,616 apartments) in the same year, while 104 additional projects were simultaneously given investment approval.
- Due to aluminum's critical role in the industry and the growing number of construction projects, these investments from domestic and foreign companies are projected to raise the demand for aluminum during the projection period.
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Automotive Industry to Dominate the Market
- As the automobile industry focuses more and more on fuel efficiency, lowering CO2 emissions, and design flexibility, aluminum plays an increasingly significant role in modern vehicles. The use of aluminum reduces the overall weight of an automobile by several kilograms in various areas.
- Many automobile components, including radiators, wheels, suspension components, bumpers, transmission bodies, engine cylinder blocks, and body components like hoods, doors, and even frames, are constructed of aluminum. It is helping the aluminum market to grow exponentially.
- According to the Vietnam Automobile Manufacturers Association, a total number of 17,314 units of automobiles were being produced in the country, the prominent share being of passenger cars (14,036 units) followed by commercial vehicles (3,174 units) and special purpose vehicles (104 units).
- Furthermore, in 2022, the passenger cars market in Vietnam is estimated to have generated USD 6,332.8 million in revenue. The automobile will likely grow at a 1.64% CAGR, resulting in a market volume of USD 6,757.8 million over the next three years.
- The Vietnam Automobile Manufacturers Association (VAMA) also suggested that the National Automobile Development Strategy (2021-2050) promote manufacturing and boost the use of e-vehicles. The number of electric vehicles will considerably expand between 2030 and 2040, reaching a production capacity of 3.5 million vehicles by that year.
- Therefore, owing to all the factors above, the development of the automotive industry and its fast-paced growth in Vietnam is likely to help the aluminum market to expand during the forecast period.
