Aluminum Production
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 323 aluminum processors in the US produce aluminum and aluminum alloys from bauxite and aluminum scrap. Products include aluminum ingots, slabs, sheets, plates, foils, bars, and extruded shapes. Primary production is when alumina (aluminum oxide) is smelted to create pure aluminum metal. Secondary production is the smelting of recycled aluminum scrap to create aluminum that can be used again.
Volatile Product Prices
Aluminum prices vary with global supply and demand and can be volatile.
Energy Intensive
Aluminum production consumes high amounts of electricity, natural gas, and fuel oil.
Industry size & Structure
The average aluminum producer employs about 177 workers and generates about $128.5 million annually.
- The aluminum production industry consists of about 323 companies that employ 57,300 workers and generate $41.5 billion annually.
- The 21 primary aluminum producers in the US are dominated by two companies, Alcoa and Century Aluminum.
- There are about 60 secondary aluminum production facilities in the US.
- About 50 companies produce aluminum products, such as sheets, plates, bars, foils, and extruded shapes.
Industry Forecast
Aluminum Production Industry Growth
Recent Developments
Sep 18, 2024 - Producer Prices Rebound
- According to the latest US Bureau of Labor Statistics data, the producer price index for aluminum producers rose by 4.4% in July compared to a year ago after falling by 7.8% in the previous July-versus-July annual comparison. Employment by the industry was relatively flat year over year in July, while average wages at primary metals manufacturers rose 2% YoY in August, BLS data show. After-tax profits for nonferrous metals companies, which include aluminum producers, plunged nearly 38% in the first quarter compared to Q1 2023 but were up 27.8% from the previous quarter, according to the Census Bureau. Following a sharp decline last year, the global price of aluminum is forecast to rise 2% in 2024 and 4% in 2025, according to the World Bank.
- A new rule proposed by the National Highway Traffic Safety Administration would establish a new Federal Motor Vehicle Safety Standard requiring that new passenger vehicles be designed to reduce fatalities and serious injuries among pedestrians struck by vehicles, Aluminum Week reported in September. The proposed rule would apply to passenger vehicles with a gross vehicle weight rating of 10,000 pounds or less, which includes multipurpose passenger vehicles like trucks, SUVs, crossovers, and vans. A recent article in The Economist stressed the urgent need to enhance passenger safety, noting that heavier SUVs and trucks contribute disproportionately to road fatalities among occupants of smaller vehicles. By prioritizing lighter materials such as aluminum, the US auto industry can improve safety outcomes while reducing the overall danger larger vehicles pose on the road. The Economist magazine noted that US roads are nearly twice as dangerous as the rich-world average.
- The Aluminum Association applauded the Biden administration’s action to stop China from avoiding import taxes by routing steel and aluminum through Mexico. According to the trade association, under an agreement between the US and Mexico reached in July, aluminum products smelted and cast in Belarus, China, Iran, and Russia will no longer be permitted to enter the US under the Section 232 exemption that Mexico enjoys as part of the US-Mexico-Canada Agreement. Aluminum imports to the US through Mexico will be subject to a 10% tariff if they contain metal smelted or cast in China, Belarus, Iran, or Russia. According to recent Aluminum Association data, aluminum demand in North America was up 4.3% year-over-year in the first quarter of 2024 -- the strongest results since 2022.
- The closure of one of the US’s last primary aluminum smelters in late January is sparking fears of an aluminum shortage in the US, Steel News reports. The shutdown of the Magnitude 7 Metals plant in Missouri, which was capable of supplying up to 30% of the nation’s aluminum needs, was the third closure of a US aluminum plant in less than two years, leaving the US with just four. The surprise closure threatens the US’s clean energy transition because aluminum is used in everything from airplanes and cars to solar panels and electric transmission lines. The Mag 7 plant closure highlights one of the major challenges facing the aluminum industry: high electricity costs, as smelting requires near-constant electricity at high volumes. Appeals have been made to the Biden administration to restart the plant as a matter of national security.
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