Researched by Industrial Info Resources (Sugar Land, Texas)--The U.S. currently imports the majority of its aluminum from Canada, primarily because the electricity needed to produce the metal is cheaper north of the border. But Century Aluminum (NASDAQ:CENX) (Chicago, Illinois), the largest producer of primary (non-recycled) aluminum in the U.S., last week announced plans for increased production and capital investment at its primary aluminum smelter in South Carolina.

In the U.S., electricity can account for up to 40% of aluminum production costs, according to the Congressional Research Service (CRS). As a result of global overcapacity, U.S. producers have faced stiff competition. In 2020, U.S. production of primary aluminum totaled 1.0 million metric tons, reports the U.S. Geological Survey (USGS), well below peak domestic production of 4.7 million metric tons in 1980, according to the CRS.

"Aluminum production is a large consumer of electricity, so access to cheap electricity is needed for the operation to be competitive. Canada has abundant, cheap hydroelectric power, especially in Quebec and British Columbia," said Joe Govreau, Industrial Info's vice president of research for the Metals & Minerals Industry.

More than two-thirds of U.S. primary aluminum imports in 2020 were from Canada, according to the CRS. In addition, the economic downturn in 2020 caused by the COVID-19 pandemic contributed to shutdowns or reduced production by U.S. aluminum-consuming industries, reducing U.S. consumption of aluminum to 2.9 million metric tons, down 41% from 2018, according to the USGS.

There is hope, however, for primary aluminum production in the U.S., according to a recent study by the Economic Policy Institute. In the two years from the March 2018 implementation of Section 232 and its 10% tariff on aluminum imports, to February 2020 (before the economic effects of COVID-19 took hold), production increased by 37.6% compared with the prior two-year period; this was due to restarts or production increases at five of the six remaining smelters in the U.S., according to the study. And at its pre-COVID peak, domestic aluminum production reached 1.14 million metric tons at an annualized rate, up from 741,000 in 2017.

Century Aluminum announced on June 3 it plans to increase production at its Mount Holly Smelter in Goose Creek, South Carolina, by 50% in the next 12 months. The company also plans to invest more than $60 million in capital projects and add over 100 new jobs, bringing the number of employees at the facility to over 400.

The producer struck an important power agreement in March with state-owned electric utility Santee Cooper, to run through the end of 2023. This allowed Century Aluminum not only to continue operations, but to invest in a restart of 50% of the second potline, and an incremental expansion of production up to 170,000 tons per year is planned through 2023. The Mount Holly smelter has a nameplate capacity of 235,000 tons per year, but has been operating only one of two potlines for years as it negotiated electricity prices with Santee Cooper.

Subscribers to Industrial Info's Global Market Intelligence (GMI) Metals & Minerals Project Database can see the detailed project report.

In total, Industrial Info is tracking $1.71 billion in aluminum projects that are planned for completion in the U.S. and Canada from June through December, including $802 million worth of smelting projects. Canada accounts for most of the smelting investment.

Attachment



Novelis Incorporated (Atlanta, Georgia), a subsidiary of Aditya Birla Group (Mumbai, India), is in the planning stage for a aluminum recycling mill expansion in Greensboro, Georgia. The expansion will add state-of-the-art equipment for recycling aluminum scrap. This project has medium (70-80%) probability of moving forward as scheduled, with kickoff in October and completion in November. Subscribers can learn more from Industrial Info's detailed project report.

In Canada, Auminerie Alouette is performing a $474 million smelter modernization in Sept-Iles, Quebec, which involves a series of upgrades at the 575,000-ton-per-year smelter: converting an anode baking furnace from using heavy oil to natural gas, replacing diesel equipment and installing robots, among others. Completion is expected in July. Subscribers can learn more from Industrial Info's detailed project report.

Meanwhile, Alcoa Aluminerie de Deschambault, a subsidiary of Alcoa Corporation (NYSE:AA) (Pittsburgh, Pennsylvania), expects to complete a $63.8 million smelter expansion in Deschambault, Quebec in October. The expansion will add new equipment to increase production and improve efficiency at the facility. Subscribers can learn more from Industrial Info's detailed project report.



Leave a Comment


comments powered by Disqus


Recomended for you...

IIR Top Power News Today

North America Luminant Generation Company LLC's 1,197-megawatt (MW) Comanche Peak 02 unit at its Comanche Peak Nuclear Generating…

China Hosts Five Clinical Trials for COVID-19 Vaccines

Researched by Industrial Info Resources (Sugar Land, Texas)--Chinese pharmaceutical company Walvax Biotechnology Company Limited recently was approved to…