US looks to reboot aluminium sector
LONDON: The US is going to build its first primary aluminium smelter in 45 years. The Biden-harris administration has awarded $500 million to Century aluminium towards the construction of a new “green” low-carbon smelter.
The aim is to halt what US consumers such as Ford Motor and Pepsico have described as a crisis in a sector that has shrunk from 19 to just four operating domestic plants over the last two decades.
With aluminium usage expected to grow strongly thanks to its use in energy transition applications such as solar power and wind turbines, the ambition is also to reduce the country’s import dependency.
However, translating ambition into actuality will depend on whether Century can find enough green power to run its new green smelter.
US production of primary aluminium fell from 3.8 million metric tonnes in 1999 to 785,000 tonnes last year.
It will decline again this year due to the idling of the New Madrid smelter in Missouri in January.
There are now just four operating plants, two owned by Alcoa and two by Century, with combined annual capacity of around 650,000 tonnes.
The Trump’s administration introduction of a 10 per cent aluminium import tariff in 2018 marked only a brief pause in the long-term decline.
US import dependency is already large at just over four million tonnes every year and is set to grow further as the 2022 Inflation Reduction Act (IRA) stimulates investment in energy transition sectors such as electric vehicles and renewable energy.
They all need aluminium. In 2020, the World Bank identified the metal as a “high-impact” and “cross-cuting” metal in all existing and potential green energy technologies.
Global usage is forecast by the International Aluminium Institute to rise from 108 million tonnes in 2022 to 176 million by 2050.