Aluminum Production

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Industry Structure, How Firms Opertate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Quarterly Insight, Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 366 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 the process in which 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.

High Energy Consumption

Aluminum production consumes high amounts of electricity, natural gas and fuel oil.

Volatile Product Prices

Aluminum prices vary with global supply and demand and can be volatile.

Industry size & Structure

The average aluminum producer employs about 155 workers and generates about $105 million annually.

    • The aluminum production industry consists of about 366 companies that employ 56,900 workers and generate $38 billion annually.
    • The 36 primary aluminum producers in the US are dominated by two companies, Alcoa and Century Aluminum.
    • There about 90 secondary aluminum production facilities in the US.
    • About 137 companies produce aluminum products, such as sheets, plates, bars, foils, and extruded shapes.
                                Industry Forecast
                                Aluminum Production Industry Growth
                                Source: Vertical IQ and Inforum

                                Coronavirus Update

                                May 14, 2022 - Trade Enforcement Drives Investment
                                • US imports of certain types of common alloy sheet fell by two-thirds between 2019 and 2021 and more than $300 million was invested in expanding domestic production after the Commerce Department and International Trade Commission imposed antidumping (AD) and countervailing duty duty (CVD) orders on imports of common alloy aluminum sheet from 16 countries, a May 2022 report from the Aluminum Association found. The ongoing recovery of the domestic market resulted in US producer shipments of common alloy sheet increasing almost 25% from 2.69 billion pounds in 2020 to 3.34 billion pounds in 2021, according to Aluminum Association data. Common alloy aluminum sheet is a flat-rolled aluminum product with a variety of uses, including transportation, building and construction, infrastructure, electrical, and marine applications.
                                • Global aluminum demand is forecast to increase by almost 40% by the end of the decade, according to a new report from the London-based International Aluminum Institute (IAI). IAI projects the aluminum sector will need to produce an additional 33.3 million metric tons to meet demand growth in all industrial sectors, pointing to a need for aluminum producers to grow from making 86.2 million metric tons in 2020 to 119.5 metric tons in 2030. The report projects North America will require an additional 5.1 million metric tons to satisfy its demand. Transportation, construction, packaging and the electrical sectors are the four key sectors that will drive demand, accounting for 75% of aluminum required, according to IAI. Opportunities related to recycling and sustainability also will help drive demand for aluminum.
                                • Production at US factories, a driver of demand for aluminum, grew in April 2022 but at a decelerated rate compared to the previous month, according to the Institute for Supply Management’s (ISM) Index. The March reading contributed to a 23-consecutive-month trend in growth. “The U.S. manufacturing sector remains in a demand-driven, supply chain-constrained environment. In April, progress slowed in solving labor shortage problems at all tiers of the supply chain. ” says Timothy Fiore, ISM Chair.
                                • The global economy’s post-pandemic rebound is reducing the current aluminum supply glut, according to Bloomberg Business. Supply kept pace with additional demand in the past, but that could change once production cuts in China begin, leaving the market in a deep deficit by 2024 and setting the stage for shortages and a price rally that could run for years, according to trading giant Trafigura Group.
                                • Employment in the aluminum manufacturing industry increased 8% year over year in March 2022 but was 0.5% short of the pre-pandemic month of March 2020, according to the US Bureau of Labor Statistics.
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