While prices remain low, opportunities abound for aluminum

While news out of Alcoa initially sounded pessimistic earlier this month, it appears there are some opportunities in the coming year for aluminum production.

Alcoa recently announced it was curtailing production and shutting down a facility in Tennessee. The price of aluminum had dropped because there was too much capacity. Later Alcoa struck a more optimistic tone, saying it expects demand to increase in 2012, which, in combination with curtailing some production, might raise the price of aluminum. That's not necessarily good for consumers, but the increased production is important for facilities like Alcoa Intalco Works in Ferndale.

Heidi Biggs Brock is also optimistic about aluminum production because of several new opportunities for the industry. As president of The Aluminum Association, Brock toured Intalco Works on Friday, Jan. 13.

Brock said the association sees opportunities in three areas in the coming years: transportation, as new vehicles are using more aluminum; packaging, and green building.

Packaging is a particularly intriguing opportunity, because it involves craft beer, an industry that's popular in Washington. She said small and medium craft brewers are becoming more interested in switching from glass bottles to aluminum cans. Along with the sustainability factor through recycling and the lower cost, she said brewers are finding their craft beers taste better and don't have the spoilage from light issues sometimes seen with bottled beer.

"We think there's a huge growth opportunity with craft brews," she said.

Potential green building growth will depend on what happens with construction, but again Brock said the opportunities are there when the industry gets back on track.

Barry Hullett, plant manager at Intalco, said while the price for aluminum remains marginal, the facility is "reasonably well positioned" to handle this period and is also optimistic.

"I expect consumption to increase in the coming year," Hullett said, noting Intalco is at about 80 percent capacity and has a healthy number of orders for the coming months. The facility currently employs around 500 people.

Increased production will be good news for a company that recently resolved a labor contract issue but is still seeking a long-term contract agreement for power.