The country’s first new flat rolled aluminum mills in 40 years were announced last year as the domestic aluminum market recovers from global saturation and embraces sustainability.
(CN) — Wherever you are, wherever you are, take a look around you. Aluminum is there, whether it’s on your desk lamp, your phone in your hand, a single-use drink can or reusable bottle nearby, the skin of a car, plane or boat in which you can travel, the main components of your laptop. or desktop computer.
Aluminum is ubiquitous. However, as recently as 2018, the aluminum market was saturated. US domestic aluminum production collapsed while cheap imports flooded the market. The United States Department of Commerce then conducted an investigation under Section 232 of the Trade Expansion Act, and the resulting report concluded that the global aluminum market posed a threat not only to to national production, but also for national security.
Six of the country’s 11 primary aluminum smelters shut down between 2012 and 2017, while the nation imported an average of five times as much finished aluminum as it produced. In 2016, imported aluminum accounted for 64% of all domestic consumption, leading to a trade deficit of $7.2 billion.
The Commerce Department report mainly pointed the finger at China, which produced so much aluminum that it had more reserves than the United States in a year. Meanwhile, the US completely lacked strategic reserves of aluminum or its derivatives and only two remaining smelters were capable of producing primary grade aluminum of a quality suitable for the defense, aerospace and technology industries.
As a result of the investigation and with bipartisan support, former President Donald Trump initially imposed a 10% tariff on aluminum imports from countries other than Canada and Mexico in early 2018. After additional measures were taken against Chinese aluminum in particular, primary aluminum production in the US rose 37.6% in 2020, breathing new life into the industry, according to a 2021 study by the Economic Policy Institute.
In the same two years, US aluminum manufacturers announced $6 billion in new capital investments and, along with that, about 5,500 new jobs. Demand slowed during the Covid-19 pandemic, but in May 2022, US manufacturer Novelis announced “the first fully integrated aluminum mill built in the United States in 40 years”.
At a cost of $2.5 billion, the Atlanta-based company will build a low-carbon flat rolling facility and recycling facility on a 3,000-acre site in Bay Minette, Alabama, creating about 1,000 jobs of new workers with a median salary of $65,000, or about 25% more than the state’s median annual household income.
Amazingly, just a few months later, a strikingly similar investment was announced in Columbus, Mississippi, just 250 miles away. There, Steel Dynamics is building its own $2.5 billion recycled aluminum roll mill, which is expected to provide 700 jobs with an average wage of $93,000, or nearly double the median household income in Mississippi .
According to the Aluminum Association, both new factories will produce products for canning and packaging. Novelis has indicated that it will have flexibility for automotive products, while Steel Dynamics has indicated that they will serve the automotive and common alloys industrial sectors. Both plan to use a significant amount of pre- and post-consumer aluminum scrap in the production process.
And both states are throwing economic incentives at the developments. More than $500 million in public contributions have been awarded to the projects, supporting incentives such as tax breaks, rebates, workforce development and infrastructure improvements.
But according to parties who negotiated the developments and others with knowledge of the international aluminum market, the new plants in Alabama and Mississippi were not just the result of recent trade policy, but also sustainability initiatives and goals of carbon emission.
Meanwhile, primary aluminum smelting in the nation has yet to recover. Last summer, Century Aluminum announced it was putting its Hawesville, Kentucky, facility in jeopardy because of “skyrocketing energy costs.” The facility was the largest producer of military-grade aluminum on the continent and with its closure, only one other smelter with similar capabilities remains in operation.
