Imagine your local brewery getting ready to package and distribute its latest 50-barrel batch of Oktoberfest. The fermentation tank is sloshing with 1,550 gallons of the rich, malty Marzen-style brew, enough for about 2,750 six-packs.

There’s just one small problem: nowhere to put it.

This has been a major issue at times, particularly during the pandemic when supply chain woes had beverage producers scrambling for solutions. There just weren’t enough aluminum cans to go around. Compared to bottles, aluminum containers are lighter, cheaper to transport, and better-suited to outdoor activities. They also block out damaging UV light and slow oxidation, keeping the product fresh and preserving shelf life.

Those are just a few of the reasons why producers have been phasing out glass in favor of aluminum. In fact, cans now account for approximately three-fourths of all packaged beer sales. And there are dozens of other beverages now packaged in aluminum cans: fruit and vegetable juices, teas, iced coffees, wine, energy drinks, and even water.

While demand has gradually been ramping up, China (the world’s largest aluminum producer) has been restricting smelting activity to curb emissions and promote new environmental standards. Those efforts have reduced exports and curtailed supply, a problem for buyers even before the widespread implementation of tariffs.

At times, major producers like Monster Beverage (NSDQ: MNST), Molson Coors (NYSE: TAP) and Coca-Cola (NYSE: KO) have all suffered from logistical challenges that forced them to “scour the globe” for supplies outside normal channels.

Keep in mind, these multinational giants have long-standing supply contracts in place to cover much of their needs. But smaller buyers serving local or regional markets can’t always meet minimum order volumes. A standard truckload is 25 pallets containing about 204,000 12-ounce cans. Many must deal with intermediary dealers, which can mean lengthy delays and added freight costs.

Fortunately, suppliers have had some time to catch up. For example, Ball Corp. (NYSE: BALL) has added several new production lines and built three new facilities, adding 6 billion cans of incremental annual capacity.

Ball operates a plant in Golden, Colorado, that manufactures 6 million aluminum containers per day. That’s more than 4,000 per minute whizzing by, pre-printed with logos and color schemes for Budweiser, Minute Maid, Red Bull, and hundreds of other brands.

A single pound of aluminum coil can make approximately 29 cans. In the United States alone, we produce more than 100 billion cans per year (recycling roughly two-thirds of them). And at times, that’s still not enough.

As we speak, there are nearly 10,000 breweries operating in the United States. Most have mountainous towers of 12- and 16-ounce containers awaiting the canning line, taking up quite a bit of warehouse space. By comparison, there are only a handful of large-scale aluminum can producers serving all these hungry customers.

If there is a lemonade stand on every street corner, I invest in the lemon supplier.

This mature market typically grows a bit faster than our gross domestic product (GDP), expanding around 5% annually. Global sales topped $50 billion last year and are forecast to approach $75 billion by the end of the decade.

But this isn’t really just about cans — after all, this strong, lightweight, and corrosion-resistant material has infinite commercial uses. In fact, aluminum has been referred to as the “Miracle Metal.” Odds are, you’re probably within arm’s reach of it right now.

As the planet’s most abundant metal, aluminum is relatively cheap, making it a top choice for countless manufacturing applications. Sporting goods, household appliances, furniture, high-voltage power transmission cables…

Incredibly, this malleable material can be delicate enough to make kitchen foil yet strong enough for military-grade body and vehicle armor. Thanks to its ability to dissipate heat, you’ll find aluminum in most phones, tablets, and televisions. And it’s a key component in the renewable energy sector, accounting for roughly 85% of solar panel materials.

But those are just niche applications compared to construction and transportation.

Like copper, aluminum possesses some metallurgical properties that make it a favored building material. This versatile and cost-effective metal is ductile (able to be formed into a thin wire) and has a high tensile strength when alloyed with manganese or zinc. It’s also non-corrosive, fire resistant, doesn’t get brittle in cold weather, and is an efficient conductor of both heat and electricity.

And unlike wood, it’s not susceptible to rot or termite damage.

Aluminum is commonly used in siding, window frames, wall cladding, ventilation shafts, and other residential building applications. And it’s even more useful in high-rise commercial projects, both structurally and decorative. Architects and engineers appreciate aluminum’s ability to bear the same load as steel at just one-third the weight.

The same strength-to-weight ratio coveted by builders is just as prized in the auto industry, where manufacturers are constantly under pressure to improve fuel economy. Any time a car or truck model can shed a few pounds (without sacrificing safety or performance) and improve gas mileage, it’s a win.

Aluminum has made that possible.

From wheels to transmissions to engine pistons, aluminum is everywhere in most vehicles. Beginning in the 1990s, luxury brands such as Audi, BMW, and Land Rover reconfigured to all-aluminum frames. And in 2014, Ford (NYSE: F) introduced the first all-aluminum F-150 truck body. It was 695 pounds lighter than prior designs, offering improved acceleration, braking, and fuel mileage, yet with greater cargo capacity and five-star safety ratings.

Aluminum can absorb twice the energy of steel before crumpling in a crash. And aluminum vehicles can stop more quickly, perhaps preventing one in the first place. If that wasn’t enough, this non-corrosive metal generally needs less maintenance and can extend a vehicle’s lifespan.

Put it all together and you can see why the amount of aluminum content in the average vehicle has climbed from less than 80 pounds in the 1970s to nearly 500 pounds today.

And if you think there’s a lot of metal in a Dodge Durango or GMC Sierra, then imagine a commercial jet. From the days of the zeppelins, flying machines had to be light and durable… and aviators found that aluminum was the ideal solution. The laws of aerodynamics haven’t changed much over the past century.

Seat tracks. Engine cowlings. Fuselage frames. Cargo door hinges. Hydraulic manifolds. Landing gear. They are all made with various aluminum alloys… either in sheets, plates, wire, or specialty extruded shapes.

Aluminum accounts for up to 80% of the average weight of a Boeing 737. The workhorse of many fleets, this popular jet is outfitted with 367,000 different parts (and 36 miles of internal wiring) from tip to tail and weighs about 90,000 pounds, unladen with fuel or cargo. The larger twin-aisle 747 contains 6 million parts and weighs 405,000 pounds.

The Airbus A350, which utilizes more advanced (and expensive) carbon fiber composite materials, still takes off with more than 40 tons of aluminum on board.

And these planes are rolling off the assembly lines at a record pace. Boeing (NYSE: BA) delivered 150 planes last quarter alone, manufacturing 737s at a rate of 38 per month — more than one a day. And there are three new jets being ordered for every one that goes out the door.

That explains why Boeing’s backlog has swelled to 5,900 commercial planes worth $520 billion. That’s about a decade’s worth of work on the books at the current pace.

From beer cans to SUVs to wind turbines to jet planes, aluminum is in high demand across many different fields. While sources vary, global consumption generally runs about 70 million metric tons annually. And a study commissioned by the International Aluminum Institute estimates that demand could rise 40% by the end of the decade.

Spot rates are currently running about $2,700 per ton. But like any commodity, prices can be volatile. Plus, the process of mining raw bauxite ore, refining it into aluminum oxide, and then further processing and purifying it to make primary aluminum is long and arduous.

I prefer a “picks and shovels” approach here. Specifically, I mean the intermediary fabricators who are paid to bend, twist, and shape the aluminum into specialty products that customers can use.

One of my favorites in this space is Kaiser Aluminum (NSDQ: KALU), a leading producer of specialty aluminum parts used by hundreds of different industrial customers (particularly in the automotive, packaging and aerospace fields).

Kaiser doesn’t mine aluminum, but takes the raw metal and molds it under exacting specifications. Just as a lumber mill turns trees into plywood, Kaiser’s facilities convert aluminum into rods, bars, plates, and other flat-rolled, extruded, forged, and highly-engineered products.

This isn’t a commodity producer whose fortunes rise and fall along with prices — but a fabrication and machining company that gets paid for services rendered. This is a volume business. Kaiser does have input costs for raw materials, but there are mechanisms in place to pass them along to customers.

That makes it essentially neutral to aluminum prices (if anything, cheaper prices spur demand from end users).

Through the first half of 2025, the company shipped 564 million pounds of aluminum products that fetched $1,600 million in sales. But I don’t pay too much attention to that figure because it includes $860 million for alloyed metal costs that were passed through to buyers. If we deduct the cost of these materials, that isolates how much Kaiser was truly compensated for its work: $740 million.

Management refers to this as “value-added revenue” (VAR), or conversion revenue. Incidentally, it breaks down to $1.30 in net revenue per pound of product sold (more than the price of raw aluminum itself).

Management is anticipating a 10% top-line increase this year feeding as much as 15% EBITDA growth. And the shareholder-friendly management team returns much of that back to investors. After tripling since 2015, the quarterly dividend distribution of $0.77 per share supports a healthy yield of 4.0% — more than double the S&P average.