American aluminium supply chain resilience requires an all-of-the-above approach to metal supply

The Aluminum Association today released a new white paper developed in collaboration with Wittsend Commodity Advisors, Powering Up American Aluminum: A Roadmap for Next Generation Supply Chain Resilience, outlining pathways to move the United States industry toward greater self-sufficiency in its domestic aluminium supply. The US aluminium industry has evolved over the last quarter century and shifted its business to become a global powerhouse in mid-and-downstream aluminium production and recycling – investing more than $10 billion in US operations over the past decade. At the same time, steady demand growth and a declining primary aluminium production footprint within the United States has led to a gap of around 4 million tonnes of raw (or unwrought) aluminium that the industry must import -- today largely from long-time trading partner Canada.

“Aluminium is a critical material for our nation’s economic and national security – found in everything from cars and cans to fighter jets, tanks and the electric grid,” said Charles Johnson, president & CEO of the Aluminum Association. “Even if we could flip a switch and turn on every idled aluminium smelter tomorrow, the US industry cannot currently produce nearly enough metal to make the products that Americans rely upon. This new research shows us that greater self-sufficiency will require an all-of-the-above approach to energy, trade and recycling policy to ensure that US manufacturers have abundant, affordable metal.”

Achieving US aluminium self-sufficiency will require time, money and commitment from both the public and private sector to build new smelters and recycle more aluminium. The white paper focuses on three main pathways to address industry metal supply:

Build new or restart idled primary aluminium smelters

• New: There are undoubtedly opportunities to build new aluminium smelting capacity in the United States, including two projects currently under discussion. Building such facilities will take time (5 – 6 years), significant capital investment ($4 - $6 billion/facility) and long-term, competitive power contracts and the equivalent annual electricity usage of the city of Boston or Nashville. To fully meet current metal needs, the United States would need to build around five 750,000 tonnes smelters. The largest fully operational smelter in the United States right now is 220,000 tonnes.
• Restart: Slightly less than half of installed US primary aluminium capacity is currently in operation. Bringing this metal back online from 4 existing smelters would require long-term, competitively priced power contracts and still significant capital investment. Even then, restarting all idled smelters would only meet around 15% of the current 4 million tonnes metal supply gap.

Recover and recycle more domestic aluminium scrap

• While domestic primary production has declined over recent decades, recycled (or secondary) aluminium production has grown, hitting record levels in 2024. Recycling aluminium is about 95% less energy intensive than primary production and relies largely on scrap aluminium as an input material. Building aluminium recycling facilities is also far less capital intensive. New sorting technologies could unlock even more available scrap aluminium. Collecting and recycling the estimated 1 - 2 million MT of usable scrap currently landfilled or exported would meet 25% - 50% of the existing US metal supply gap.

Import metal from trusted partners, especially Canada.

• As the industry works to produce more domestic aluminium, access to affordable, reliable Canadian primary aluminium is a vital bridge for metal supply and a good deal for America. The aluminium the United States imports from Canada is equivalent to more than 4 Hoover Dams worth of energy each year – often at a significant discount from direct electricity imports. Aluminium smelters in Canada typically pay $25 - $40 per MWh of electricity vs. $60 - $80 per MWh in the United States. Further, every one aluminium smelter job in Canada supports about 13 US aluminium jobs further downstream.

Enormous electricity requirements for primary aluminium production poses a unique challenge for industry self-sufficiency. A single new aluminium smelter uses ~11 TWh – a similar amount of electricity used by a major US city like Boston or Nashville each year. Furthermore, to be economically competitive, a smelter requires a 10 – 20 year contract with electricity costs ~$40/MWh. Technology companies are currently committing upward of $115/MWh for power at AI data centers. The Energy Information Administration estimates that the United States will have an energy deficit ~ 50 TWh by 2035 on current trendlines.

Consistent with the Trump administration’s vision to make the industry more self-sufficient and less reliant on imported metal, the Aluminum Association is calling on policymakers to support the Aluminium Agenda on areas like energy, trade and recycling policy to increase American self-reliance in this critical sector of the manufacturing economy.