Aluminum Production NAICS 3313

May 8, 2026 - Indonesia Expands Aluminum Production

• Disruptions to the global aluminum supply related to the conflict in the Middle East along with Indonesia’s rapid capacity expansion are reshaping the global market for aluminum, S&P Global reports. Damage to Middle Eastern smelters and shipping constraints have removed an estimated 1.4-2 million metric tons of annualized capacity, with recovery timelines extending up to a year, pushing prices higher and widening the projected 2026 deficit. While capacity destruction in the Gulf states has triggered a “flight-to-safety” benefitting US producers like Alcoa and Century Aluminum through stronger pricing and "windfall" margins, global supply gaps are increasingly being filled by countries like Indonesia, which is building an end-to-end value chain that moves from bauxite ores to downstream aluminum ingots. Competition from foreign suppliers could limit long-term gains for US producers.
• Energy-hungry data centers represent a threat to aluminum smelters, the CFO of Alcoa warns, as reported in Aluminum International Today. The aluminum giant’s warning highlights a growing structural challenge for aluminum producers: intensifying competition with data centers for affordable electricity. Because smelting is one of the most energy‑intensive industrial processes, producers rely on long‑term access to low‑cost power, typically $30–$40 per megawatt hour. But data centers are willing to pay more than $100 per MWh, pushing power markets toward higher prices and making it harder for smelters to secure viable contracts. Alcoa notes this dynamic has already contributed to the closure of its West Coast smelters and poses a major barrier to building new US capacity. Overall, the rise of data centers threatens long‑term domestic smelting competitiveness and could limit future domestic aluminum production growth.

• Researchers at Oak Ridge National Laboratory have developed an innovative aluminum alloy, called RidgeAlloy, that transforms low-value aluminum scrap into a high-value domestic supply chain for manufacturing new structural auto parts, QualityDigest reports. Amid tight global supplies of the metal, a wave of aluminum auto body scrap is set to enter salvage systems over the next decade. But it’s too impure to be safely reused in new, critical automotive parts, limiting its value. RidgeAlloy opens a pathway to high-value recycled material use, potentially reducing reliance on imported primary aluminum and lowering production energy needs by up to 95%. Aluminum producers that adopt or support this type of recycled alloy technology can boost domestic supply-chain resilience and capture rising demand for lightweight vehicles and EVs, boosting plant utilization and margins, while producers that rely solely on primary aluminum may face pressure as recycled alternatives become viable.
• Producer prices for alumina and aluminum producers and processors continued their steep ascent in March, soaring 32.4% compared to a year ago after rising 16.1% in the previous March-versus-March annual comparison, according to the latest US Bureau of Labor Statistics data. Rising Iran war-related energy costs, supply constraints, tariffs, and strong global demand are pushing production costs higher for the energy-intensive aluminum industry. Meanwhile, employment by alumina, aluminum, and other nonferrous metal producers was flat year over year in February, while the average industry wage for workers employed by primary metals manufacturers was unchanged YoY in March at $29.98 per hour, just shy of its high in July 2025, BLS data show.