Aluminum is still on track to become the primary replacement for single-use plastics, even though recent shortages have pushed up the price of the metal. ‘The shortage is temporary, but aluminium packaging is a strong trend where we expect demand to increase,’ said Antonio Garufi, manager of the Decalia Circular Economy fund.
Garufi said there was a noticeable increase in the use of aluminum cans for newly-launched beverages, which grew from 36% in 2015 to 67% in 2019. Garufi invests in Ball Corp and Crown, two leading producers of aluminum cans globally, which form part of the fund’s sustainable packaging theme. ‘Last year, the main producers realised that there is capacity to be added, and they are currently struggling to keep up with demand. The market will adapt in the following couple of years,’ Garufi said.
The aluminum trend has also been picked up by Citywire AAA-rated Amber Fairbanks, whose €291.14m Mirova Global Sustainable Equity fund bought shares in Ball Corp in November 2020. ‘Ball Corp is not one of those companies that have taken off yet. But I think over the next several years, as awareness increases, it’s really going to be a great stock to own. Over time, this will be a company that really can address a sizable issue,’ Fairbanks said. Both fund managers expect aluminium cans to access new markets within the next couple of years.