{"id":5476,"date":"2019-06-30T12:33:45","date_gmt":"2019-06-30T12:33:45","guid":{"rendered":"https:\/\/www.alcircle.com\/blog\/?p=5476"},"modified":"2019-07-01T12:42:45","modified_gmt":"2019-07-01T12:42:45","slug":"north-american-primary-aluminium-industry-glance-first-five-months-2019","status":"publish","type":"post","link":"https:\/\/www.alcircle.com\/blog\/north-american-primary-aluminium-industry-glance-first-five-months-2019","title":{"rendered":"North American Primary aluminium industry at a glance in the first five months of 2019"},"content":{"rendered":"<p>The 10% tariffs on all imported aluminium imposed by Trump in March 2018 have generated ample interest in the North American aluminium sector, more so because Trump\u2019s tariffs also included Canada and Mexico, Canada remaining the top aluminium supplier to the U.S. so far. While major part of the industry players opposed the tariffs, claiming that the tariffs will disrupt the North American aluminium supply chain, there were also a section who firmly believed that tariffs helped the resurrection of the primary aluminium sector in the U.S. It was the downstream players in the U.S. who had to bear the impact of aluminium tariffs. Most of the industry associations in North America lobbied against the tariffs and the proposed import quota on Canada and Mexico. Finally, the tariffs on Canada and Mexico have been lifted in May. An analysis of the production trends in primary aluminium in the U.S. and Canada in the first five months of 2019 will give a clearer picture of how the tariffs impacted the industry.<\/p>\n<p>Aluminum Association surveys the primary aluminium industry in the U.S. and Canada by taking into account the production numbers of all major producers.<\/p>\n<p style=\"padding-left: 30px; text-align: center;\"><a href=\"https:\/\/www.alcircle.com\/blog\/wp-content\/uploads\/2019\/07\/north-america-aluminium-production.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-5477\" src=\"https:\/\/www.alcircle.com\/blog\/wp-content\/uploads\/2019\/07\/north-america-aluminium-production.jpg\" alt=\"north america aluminium production\" width=\"765\" height=\"247\" srcset=\"https:\/\/www.alcircle.com\/blog\/wp-content\/uploads\/2019\/07\/north-america-aluminium-production.jpg 765w, https:\/\/www.alcircle.com\/blog\/wp-content\/uploads\/2019\/07\/north-america-aluminium-production-300x97.jpg 300w, https:\/\/www.alcircle.com\/blog\/wp-content\/uploads\/2019\/07\/north-america-aluminium-production-150x48.jpg 150w, https:\/\/www.alcircle.com\/blog\/wp-content\/uploads\/2019\/07\/north-america-aluminium-production-696x225.jpg 696w\" sizes=\"auto, (max-width: 765px) 100vw, 765px\" \/><\/a><\/p>\n<p>Based on Aluminum Association surveys, as shown in the table above, the U.S. registered the highest primary aluminium production in May at an estimated 97,537 tonnes, an increase of about 33% from 73,393 tonnes produced in May 2018. The U.S. churned out 475,071 tonnes of primary aluminium in the first five months of 2019, registering a growth of about 39% from the same period of 2018. It is in fact a commendable production growth for an industry which has been constantly showing negative production growth since 2013, running at about 37% of its original capacity.<\/p>\n<p>The estimated annual rate of U.S. primary aluminium production totalled 1,148.4 thousand tons during May 2019, an increase of about 33 per cent over the May 2018 annual rate of 864.1 thousand tonnes.\u00a0\u00a0Month on month, the annual rate of production was slightly off from the April 2019 annual rate of 1,154.5 thousand tonnes.\u00a0\u00a0The year\u2010to\u2010date production rate through May 2019 stood at 1,148.4 thousand tonnes, up 39 per cent over the YTD 2018 rate of 826.9 thousand tonnes.<\/p>\n<p>The surge was driven by restarting of capacity by major aluminium producers after tariffs were announced. If the aim of the so-called \u201cSection 232\u201d tariffs was to boost domestic production, Trump administration can put this 39% growth rate as a positive example.<\/p>\n<p>Century Aluminum restarted an idled plant in Kentucky and reactivates a third idled line at its Hawesville smelter in Kentucky. The first line started in the third quarter and the second was due by the end of last year. Magnitude 7 Metals has resumed operations at the New Madrid smelter in Missouri, which was on the card, encouraged by the tariffs. Similarly, Alcoa\u2019s restart of idled capacity at its Warrick smelter in Indiana was announced at the end of 2017 and it was further encouraged by the tariffs. Though restarts started after the tariffs, the decisions were taken beforehand.<\/p>\n<p><a href=\"https:\/\/www.alcircle.com\/blog\/wp-content\/uploads\/2019\/07\/abl-smelter.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-5478\" src=\"https:\/\/www.alcircle.com\/blog\/wp-content\/uploads\/2019\/07\/abl-smelter.jpg\" alt=\"abl smelter\" width=\"1024\" height=\"674\" srcset=\"https:\/\/www.alcircle.com\/blog\/wp-content\/uploads\/2019\/07\/abl-smelter.jpg 1024w, https:\/\/www.alcircle.com\/blog\/wp-content\/uploads\/2019\/07\/abl-smelter-300x197.jpg 300w, https:\/\/www.alcircle.com\/blog\/wp-content\/uploads\/2019\/07\/abl-smelter-768x506.jpg 768w, https:\/\/www.alcircle.com\/blog\/wp-content\/uploads\/2019\/07\/abl-smelter-638x420.jpg 638w, https:\/\/www.alcircle.com\/blog\/wp-content\/uploads\/2019\/07\/abl-smelter-150x99.jpg 150w, https:\/\/www.alcircle.com\/blog\/wp-content\/uploads\/2019\/07\/abl-smelter-696x458.jpg 696w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/a><\/p>\n<p>Canada\u2019s primary aluminium production however, dropped in the first five months of 2019 driven by labour issues at one of the smelters. Canada produced 2,42,640 tonnes of primary aluminium in May, about 2.2% less than the volume produced in May 2018. Canada churned out 1,183,539 tonnes of primary aluminium in the first five months of 2019, registering a drop of about 2.9% from the same period of 2018. Canadian aluminium industry has not seen much of an impact on its production because of the tariffs. ABI smelter, owned by Alcoa (74.95%) and Rio Tinto Alcan (25.05%), with an annual operating capacity of 413,000 tonnes per year has been operating at a reduced capacity since January 11, 2018 as the United Steelworkers rejected a labour contract for the hourly workers.\u00a0If the labour issue gets resolved, Canada will bounce back with its nameplate capacity.<\/p>\n<p>Total North American primary aluminium production for the first five months of 2019 stood at 1,658,610 tonnes, up from 1,559,938 tonnes in the same period of 2018.<\/p>\n<p><a href=\"https:\/\/www.alcircle.com\/blog\/wp-content\/uploads\/2019\/06\/primary-aluminium-North-A.png\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-5481\" src=\"https:\/\/www.alcircle.com\/blog\/wp-content\/uploads\/2019\/06\/primary-aluminium-North-A.png\" alt=\"primary aluminium North A\" width=\"463\" height=\"267\" srcset=\"https:\/\/www.alcircle.com\/blog\/wp-content\/uploads\/2019\/06\/primary-aluminium-North-A.png 463w, https:\/\/www.alcircle.com\/blog\/wp-content\/uploads\/2019\/06\/primary-aluminium-North-A-300x173.png 300w, https:\/\/www.alcircle.com\/blog\/wp-content\/uploads\/2019\/06\/primary-aluminium-North-A-150x87.png 150w\" sizes=\"auto, (max-width: 463px) 100vw, 463px\" \/><\/a><\/p>\n<p>It remains to be seen how much more dormant capacity will be back into life because the price of aluminium is currently hovering at a low range and managing profitability with such low price will be tough for smelters. No primary producers have announced plans to build new aluminium smelters in the United States. Analysts don\u2019t expect them to announce new projects despite the tariffs because of the high American electricity costs and labour costs.<\/p>\n<p>The U.S. will continue to remain import dependent in case of aluminium and aluminium semis and China\u2019s semi-finished export will continue to rise due to slower domestic demand growth. Aluminum Association estimates that even if all the idled capacity in the country were restarted, the U.S. could still meet less than half of its primary needs. The OECD has concluded in a recent report that \u201cmarket distortions appear to be a genuine concern in the aluminium industry\u201d. Chinese overcapacity remains a true concern and aluminium associations across the world are demanding a solution to China\u2019s massive production and export capacity. We will again come up with an analysis of the trends after the third quarter, however, the numbers are not likely to see a significant change from the first two quarters, though year-over-year the U.S will register an increase in production.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The 10% tariffs on all imported aluminium imposed by Trump in March 2018 have generated ample interest in the North American aluminium sector, more so because Trump\u2019s tariffs also included Canada and Mexico, Canada remaining the top aluminium supplier to the U.S. so far. While major part of the industry players opposed the tariffs, claiming [&hellip;]<\/p>\n","protected":false},"author":6,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5,168],"tags":[236,241,235,206,239,240,237,238],"class_list":{"0":"post-5476","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-open-forum-for-aluminum-community-blog","7":"category-primary-aluminium","8":"tag-canada","9":"tag-import-tariff","10":"tag-north-amercia","11":"tag-primary-aluminium-2","12":"tag-the-us","13":"tag-trumps-tariffs","14":"tag-united-states","15":"tag-us-tariffs"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>North American Primary aluminium industry at a glance in the first five months of 2019 - AL Circle Blog<\/title>\n<meta name=\"description\" content=\"North American primary aluminium production for the first five months of 2019: the total production of the U.S. and Canada.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.alcircle.com\/blog\/north-american-primary-aluminium-industry-glance-first-five-months-2019\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"North American Primary aluminium industry at a glance in the first five months of 2019 - 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