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 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

                                Recent Developments

                                Mar 17, 2023 - Near Record Aluminum Demand
                                • North American aluminum demand neared record levels last year, up nearly 5% over 2021, the Aluminum Association reported in March. Aluminum demand in the US and Canada (shipments by domestic producers plus imports) totaled an estimated 27.5 billion pounds in 2022, up 4.8% over 2021, with overall demand approaching record levels seen in 2018 and 2019. Most major semi-fabricated – or “mill” – product categories saw increased year-over-year demand growth, led by sheet and plate products (6.1%) and foil (5.1%). In total, mill product demand grew 4.1% year-over-year. Aluminum exports (excluding scrap) increased 3.8% from the year-ago level. While estimates show year-over-year growth, demand eased in the second half of the year. Last year, the US aluminum industry announced more investment in domestic manufacturing than in the past several decades combined, according to the association.
                                • Beginning on March 10, the Biden administration began imposing a 200% tariff on aluminum and derivative aluminum products produced in Russia, Reuters reports. The United States will also apply a 200% tariff on aluminum imports of primary aluminum produced in Russia from April 10. The new tariffs – imposed under section 232 of the Trade Expansion Act of 1962 – were announced on the anniversary of Russia’s invasion of Ukraine. "President Biden has made it a priority to mitigate the effects of Russia’s invasion on domestic industries critical to our national security, and this includes the American aluminum industry," the US Department of Commerce said. US producers welcomed the administration’s sanctioning of Russia and the tariffs as a means of leveling the playing field for US producers. Russian aluminum is produced by Rusal, which accounts for about 6% of global supplies, per Reuters.
                                • US aluminum producer Alcoa will begin installation of a new steam recycling technology at its Wagerup aluminum refinery in Australia, Aluminum Insider reported in February. As part of its Refinery of the Future initiative, Alcoa will begin installation of the 4 MW Mechanical Vapor Recompression (MVR) system that, when combined with a decarbonized grid and other technologies, could reduce a refinery’s carbon production by up to 98%, according to Alcoa. MVR uses electricity to exert extreme pressure on the waste steam, recycling the water and thermal energy both at once. Currently, all the alumina refineries let out the waste heat from the process polluting the atmosphere with toxic gases while using a lot of excess water and energy. In addition to saving energy, MVR saves money, as recycling steam is generally cheaper than generating it. Australia has provided $7.7 million for the project.
                                • Wine in cans is gaining in popularity as the stigma of alternative wine containers has drained away, according to a January article in The Guardian. Wine, water, and emerging beverage companies in the US and Europe are adopting aluminum cans because of its superior attributes of sustainability, branding, convenience, performance and taste, according to the Can Manufacturers Institute (CMI). While canned wines are not experiencing the same demand as canned beer and spirits categories, the category is experiencing rapid growth. Between 2017 and 2021, volume sales for canned wine in Nielsen-tracked channels increased more than 3,800%, BevAlc Insights by Drizly reports. When compared to reusable kegs and bag-in-box containers, canned wine is convenient, stylish, and highly recyclable, The Guardian reported.
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