Aluminum is one of the most ubiquitous but underappreciated metals in the world, found in everything from soda cans and food packaging to toys, cars and houses. More than 45 million tons of the metal are consumed annually.

Nonetheless, aluminum’s consumption is extremely sensitive to economic conditions and, as a result, miners of bauxite—the raw input required to smelt aluminum—suffered dearly during the global recession. But with the global economy on a general, if uneven, path to recovery, aluminum demand is forecast to rebound strongly in the coming years.

According to a report recently issued by the Freedonia Group, a market research firm, world aluminum demand is expected to grow by nearly 6 percent annually through 2017, reaching 86.5 million metric tons by that year.

Growing incomes around the world will drive much of that demand growth, allowing consumers to purchase more packaged food, automobiles and consumer goods such as washing machines and refrigerators.

At the same time, aluminum will become an increasingly common input for infrastructure projects such as bridges and, to keep manufacturing costs down and to meet increasingly stringent mileage requirements, more and more will be used in vehicle manufacturing. Freedonia estimates that aluminum use per automobile will rise from the current 120 kilograms per vehicle to 132 kilograms by 2017.

But even as demand grows, bauxite is the very definition of a commodity with abundant competition in production. As a result, it is critical that companies producing bauxite must maintain as costs as low as possible.

Alumina Limited (NYSE: AWC) operates eight bauxite mines on four continents along with nine refineries and two smelters. It is also one of the lowest-cost producers of alumina in the world, ranking 7th with cash costs of $273 per ton produced.

After a strong run throughout much of 2012 and into early 2013, aluminum prices have declined sharply over the past six months, as Australian production has normalized following severe flooding earlier this year and lower Chinese bauxite prices have all put downward pressure on the commodity. After peaking at about AUD350 earlier this year, alumina is currently selling for about AUD320 per ton.

However, alumina prices should begin strengthening for two primary reasons.

First, despite having huge bauxite reserves within its own territory, China is a major importer of bauxite, buying in an estimated 50 million tons this year. By 2020, that number is expected to rise to nearly 100 million tons, largely thanks to low-quality reserves and production inefficiencies causing supply to fail to keep up with demand.

Alumina’s mines and smelters are strategically located to export production to China, taking advantage of that growing demand.

Indonesia, one of the world’s largest producers of bauxite, will also implement an export ban on raw bauxite beginning January 1 and will impose a 20 percent tax on the export of processed ore. With China currently importing about 80 percent of its bauxite from Indonesia, that will leave it needing new export partners to make up for what will certainly be a sizable shortfall.

In addition to those fundamental shifts in the market, Alumina is also benefiting from changing pricing dynamics.

Historically, bauxite and alumina have been priced based on London Metal Exchange (LME) prices which typically lag spot prices in the market. In 2011, the price of about 85 percent of Alumina’s production contracts were linked to LME prices, but about a fifth of those production contracts are expiring each year. Last year, 35 percent of production was linked to spot prices as will 53 percent of this year’s production, resulting in more favorable prices. Moreover, all new contracts are being linked to spot prices.

There is some risk that Indonesia might back off its plan for export bans; a number of organizations are saying they could destroy the country’s mining industry. However, with 15 percent market share, Alumina is already the largest supplier of key inputs in the world. As a result, steady sales volume growth in conjunction with growing global demand will ensure growing profits for the company.

The newest addition to the Long-Term Portfolio, Alumina Limited is a buy up to 6.50.