Beyond the kitchen: How aluminium foil is transforming global markets

The global aluminium foil consumption rose from 5.5 million tonnes in 2018 and is estimated to cross six million tonnes in 2025. As per competitive analysis market research, the world's second-largest economy by nominal GDP, China, continues to dominate the aluminium foil landscape as the world’s leading producer, consumer, and exporter. In 2024, China produced an estimated four million tonnes of aluminium foil, exporting more than 1.5 million tonnes to various international markets.

In the coming years, according to various consumer trends reports, China’s aluminium foil consumption may be influenced by the ongoing slowdown in economic growth. Nevertheless, rising demand from the electric vehicle (EV) sector, particularly for use in lithium-ion battery production, is expected to support domestic consumption levels.

China reported better-than-expected economic growth for the second quarter, despite an ongoing trade war with the United States, as diversification efforts into non-US markets buoyed exports. Gross domestic product (GDP) expanded 5.2 per cent in the second quarter from the same period a year earlier, according to the National Bureau of Statistics (NBS) at a press conference on July 15, 2025.

The GDP growth in the second quarter was a slowdown from a 5.4 per cent expansion in the first three months of the year. Together, GDP growth for the first half of the year compared to the same period last year stood at 5.3 per cent, according to the NBS. China’s economy remains under mounting external and internal pressure to meet its ambitious target of “around 5 per cent” growth set for this year; a goal economists believe will be tough to achieve without further policy support.

In June 2025, consumer spending fell short of expectations while industrial production exceeded them, according to NBS on July 15, 2025. Retail sales slowed to 4.8 per cent from the same month last year, 2024, compared with 6.4 per cent growth in May. Industrial output expanded 6.8 per cent compared with June last year, 2024, an increase from 5.8 per cent last month, likely due to the trade truce.

Meanwhile, as per market statistics, the housing market is slowing again, weighing on the economy after a brief recovery following last year’s stimulus. Investment in the sector declined 11.2 per cent in the first six months compared to the same period in the previous year (2024), according to NBS data. Despite growth in the H1 2025 exceeding the 5 per cent target, economists warned that existing obstacles could weigh on exports and slow economic momentum in the months ahead. Overall, aluminium foil demand in China is expected to grow.

Aluminium foil is no longer used solely in conventional sectors such as food packaging or air conditioning. Its role has expanded dramatically into high-tech, high-growth industries that are central to China’s industrial policy. These include:

•             Electric vehicles (EVs) and lithium-ion batteries

The most significant new driver of foil consumption is battery production. Aluminium foil is used as the positive current collector in lithium-ion batteries. With China leading global EV production (accounting for more than 60 per cent of global sales in 2023), battery-grade aluminium foil has become a strategic commodity. Each GWh of battery production consumes up to 800 tonnes of foil. Leading battery producers have significantly scaled up their capacity, and this trend is expected to continue even as broader economic indicators slow. Importantly, this demand is policy-insulated—backed by subsidies, R&D incentives, and green mandates from the Chinese government.

•             Energy storage systems (ESS)

The rise of renewable energy and grid stability projects across China has led to a parallel boom in energy storage systems. These also require lithium-based batteries—therefore increasing demand for foil. Unlike the consumer-driven EV segment, ESS demand is tied to state investment in energy transition, which remains robust despite the macroeconomic environment.

•             Pharmaceutical and medical packaging

Aluminium foil remains indispensable in drug blister packs, medical pouches, and sterile packaging. Although not as fast-growing as EV applications, the pharmaceutical sector has become more prominent since the COVID-19 pandemic. China is scaling up domestic pharmaceutical production, not only for domestic consumption but also for export. This creates stable, resilient demand for high-barrier, contamination-resistant foil products.

•             Food packaging and E-commerce logistics

While broader consumer demand may be soft, e-commerce and online food delivery continue to grow, albeit at a slower rate. Aluminium foil-based multilayer packaging—used for insulation, hygiene, and shelf-life extension—remains a key material in these supply chains. China's increasing preference for sustainable and recyclable packaging also favours aluminium over plastic.

•             Consumer electronics and semiconductors

Another advanced use case lies in thermal management solutions for electronics—cooling devices, smartphone batteries, and chip packaging. China's ambitions to achieve semiconductor self-reliance are still nascent but already spurring upstream demand for speciality materials, including aluminium foil for heat sinks and precision components.

Moreover, the nature of aluminium foil demand is increasingly quality-sensitive. Ultra-thin, high-purity foil for batteries and electronics is replacing the bulk consumption of conventional packaging foil. This technological upgrade is driving value growth even when volume growth is modest.

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In essence, aluminium foil demand in China is a microcosm of China's economic rebalancing: slower in speed, sharper in focus, and deeper in strategic alignment with national goals. Despite macro headwinds, aluminium foil has become embedded in the material's backbone of the industries China is doubling down on.

Aluminium foil demand in the Rest of the Asia Pacific region, which includes Japan along with key emerging economies such as India, South Korea, Thailand and Indonesia, is expected to grow at an average annual rate of approximately 4.17 per cent between 2024 and 2030. Within the region, India is projected to experience relatively stronger growth, with aluminium foil consumption expected to increase at around 5.4 per cent per annum over the same period.

Source：AlCircle