Decline of U.S. Primary Aluminum Production and the Growth of Secondary Aluminum

By Alton Tabereaux, Contributing Editor.

The U.S. was once ranked as one of the top primary aluminum producing countries in the world. It grew significantly thanks to the war efforts during World War I in the 1910s and through to the 1940s. Since 1940, there have been 28 different aluminum smelters built in the U.S., which operated for about 40–50 years, but they ultimately closed over time. Now, the U.S. primary aluminum market is a fraction of its previous capacity and is struggling to maintain capacity of this critical metal in the face of high energy prices and outdated equipment. This article will provide an overview of the growth and decline of the U.S. primary aluminum industry, as well as how the growth of Chinese production affected this decline. In addition, this article will look at the growth of secondary aluminum and future trends for the industry.

Historical Perspective

The U.S. was the leading global producer of primary aluminum throughout the 20^th Century from 1901 to 2001. During World War I, U.S. primary aluminum production increased from 2,296 tonnes in 1900 to 21,450 tonnes in 1913, representing 33% of global aluminum production. In 1915, production surged to 52,210 tonnes, representing 53% of global production. However, the Great Depression led to a significant decline, reducing primary aluminum production to one-third of its previous levels between 1930 and 1934.

World War II provided another significant boost to U.S. aluminum, with aluminum production expanding sharply from 149,000 tonnes in 1939 to 835,000 tonnes in 1943, with global production increasing from 21% to 43%. At the end of World War II, the country was producing over 40% of the global supply of primary aluminum. Production continued to rise until 1980, when it peaked at 4.65 million tonnes per year (Figure 1) and about 35,000 people were employed in primary aluminum production.

During that growth period, the U.S. constructed 40 aluminum smelters, which was due in a large part to the generation of hydroelectrical power from large dams built on major rivers, including 31 BPA dams (Grand Coulee, Bonneville, etc.) on the Columbia River completed from 1933–1941 and nine TVA dams (Wilson, Wheeler, etc.) on the Tennessee River from 1918–1924. These dams provided long-term affordable electricity to new U.S. smelters from 1940 to the 1980s.

Production began falling after the 1980s, but the industry remained strong throughout the 1990s. In 1995, the U.S. had 23 primary smelters across 14 states that produced over 3.3 million tonnes of primary aluminum. From 2000 to 2020, 15 primary facilities shut down, two more remained idle, and nearly 45,000 jobs disappeared. By 2021, after production had dropped by 28% in a single year, the U.S. was only the ninth-largest primary aluminum producing country and had less than 2% of the global market share.

In 2023, the downward trend in U.S. aluminum continued with production plummeting to 0.75 million tonnes (a 15% decrease from 2022), due to the closure of 28 U.S. aluminum smelters, resulting in only a 1.1% share of global production (Figure 2). The U.S. primary aluminum and aluminum industry provided 7,555 jobs in 2020, which declined by -9.6% to 4,367 in 2022, largely due to plant closures and curtailments during the period.¹

The decline of the U.S. primary aluminum industry coincides with the meteoric rise in primary aluminum production in China (Figure 3). In 2000, China only produced 13% of the global share of primary aluminum. Since then, it has grown by more than 2,000%, reaching 39 million tonnes in 2021, representing 57% of worldwide capacity. In 2023, China produced 41.5 million tonnes of primary aluminum, which was a record high, representing 60% of global production (Figure 3). China is now ranked number one in the world, with its annual production being ten times more than the next biggest producer, India—with U.S. production trailing far behind at 12^th in the world (Table I).

China’s rapid growth is largely due to the construction of a massive number of large, modern smelters with a high number of potlines with cells at very high amperage (ranging from 300 to 600 kA). The country has made enormously large investments in the construction of 60 so called “mega” smelters, all of which feature state-of-the-art aluminum cell technology—made possible thanks to significantly lower construction and labor costs than in Western countries and Chinese government support. China also actively replaces old smelters with new, more modern technologies. According to Pawlek’s 2023 worldwide aluminum data,² “In China, smelters with a capacity smaller than 300,000 tpy have been closed or replaced with more modern technology. As a result, some 20 smelters in China have been shut down, bringing Chinese aluminum capacity closer to a little bit more than 53 million tpy.”

By comparison, the U.S. smelters are older, smaller low amperage aluminum cells with lower aluminum production per kA power consumption. The U.S. has outdated smelter manufacturing equipment, electrical systems, and computer control systems, which were originally installed in the smelters when they were built in 1970–1980. The newest U.S. operating aluminum smelter is the 40-year-old Mount Holly smelter. In addition, U.S. smelters no longer have access to affordable long-term contracts for electricity, as well as a lack of low-cost renewable hydro, wind, solar, and nuclear energy.

All aluminum smelters require long-term power contracts for continuously generated electrical power. However, China’s super large aluminum smelters in China require extra large quantities of electrical power. The major difference between the U.S. and China’s primary aluminum production costs is that the U.S. is facing unaffordable escalating electrical power costs compared with China’s consistent, lower cost electrical power generation from widely available coal-powered energy. China has also benefited from intense global aluminum price competition due to its significantly lower production costs and very low labor costs (including worker benefits), as well as substantial government rebates that provide employment and company profits.

However, it’s important to point out that while China is the largest producer of primary aluminum, it also has the highest emissions intensity during production. China’s emissions are about 65% higher than in the U.S. Every tonne of aluminum produced in China is associated with an additional 5 t CO₂e/tAl, relative to 1 t CO₂e/tAl produced in the U.S. Considering the fact that China produced 41.59 million tonnes of aluminum in 2023, the country also generated 208 million tonnes of CO₂. Over 80% of China’s aluminum production capacity relies on coal-fired power to generate electricity. In addition, the majority of carbon emissions in aluminum production, specifically within the electrolysis process, comes directly from the consumption of carbon anodes, accounting for nearly 80% of the sector’s greenhouse gas emissions. This means that the majority of carbon emissions from primary aluminum production in China are directly attributed to the consumption of carbon anodes during electrolysis at all or most of its 60 aluminum smelters.

Current U.S. Primary Aluminum Production

At the start of 2024, only three companies operated aluminum smelters in the U.S., including Alcoa, Century Aluminum, and Magnitude 7 Metals, with a total of five smelters in operation. However, with the announced closure of the Magnitude 7 Metals aluminum smelter in January 2024, only four smelters remain in operation. The U.S. aluminum smelting operations still in operation or recently closed or idled are shown in Table II.

Alcoa

Alcoa has two operational smelters in the U.S., including its Massena Operations in Massena, NY, and its Warrick Operations in Evansville, IN. Built in 1902, Massena is the world’s oldest continuously operating smelter. The smelter was founded on the use of renewable power from the powerhouse connecting the St. Lawrence and Grasse rivers, which continues to power the plant’s smelter and casting operations to this day. The plant was split into two operations, Massena West and Massena East (formerly Reynolds Aluminum). While Massena East was permanently closed in 2015, Alcoa signed an agreement with New York State in the same year to support the continued operation of Massena West, which has a total capacity of 130,000 tpy (Figure 4).

The Warrick Operations initially began production in 1960, but has gone through a series of ups and downs in recent years. Alcoa announced plans to permanently close its 269,000 tonne Warrick smelter in 2016 in response to market conditions. However, only a year later, the company announced it would restart three of the five potlines (with 161,400 tonnes of annual capacity) to improve the competitiveness of the on-site rolling mill. Meanwhile, the rolling mill was divested to Kaiser in 2021 and the smelter continued to operate, with a partial curtailment announced in 2022. The Warrick Operations have a current operating capacity of 162,000 tpy.

The Intalco smelter in Ferndale, WA, first started production in 1966, with three potlines containing 480 cells of Pechiney AP13 technology that operated at about 140 kA. In March 2023, Alcoa announced the permanent closure of the smelter, which had been idled since 2020. The now-closed Intalco plant once produced 279,000 tpy, which required a steady load of 405 MW of electricity to fully operate. During 2022, Alcoa was heavily involved in negotiations to sell the facility to Blue Wolf Capital Partners, LLC, but withdrew from talks in late December of that year after they were unable to secure a below-market-rate energy contract for affordable clean power to operate the facility.

Alcoa’s Wenatchee aluminum smelter in Washington had been idled since 2015, and then permanently closed in early 2021. At its peak, the Wenatchee smelter processed 146,000 tonnes of aluminum and employed about 1,000 people. The Rocky Reach hydro dam located about seven miles upstream from the city of Wenatchee provided 1,349 MW of electricity. During the late 1980s and early 1990s, Wenatchee Works suffered from market ups and downs. In particular, a glut in the foreign market caused prices for aluminum ingot to plunge, which combined with rising energy costs led to the closure and layoffs.

Century Aluminum

n the U.S., Century Aluminum has two operating smelters, located in Sebree, KY, and Mount Holly, SC. The Sebree smelter began operations in 1973 and is 100% owned and operated by Century. The smelter has a production capacity of approximately 220,000 tpy and employs approximately 625 workers within the tri-state region.

The Mount Holly smelter opened in 1980. It has two potlines with 360 cells of Alcoa A697 technology that operate at 228 kA. The smelter has a nameplate capacity of 230,000 tpy and employs around 465 employees. Mount Holly has been operating at 75% of its capacity since 2021 due to high energy costs with the actual production in 2023 being 172,000 tpy. A three-year electrical power contract with Santee Cooper was signed in 2024, providing 295 MW of electric power beginning on January 1, 2024 and running through December 2026. This power supply contract allows the smelter to continue operating at its current capacity. However, Century is looking to increase production and employment at the site.

The Hawesville smelter, located adjacent to the Ohio River in Kentucky, first started production in 1969. The smelter has five potlines of Kaiser P69 cell technology (Figure 5), with 560 cells that operated at around 170 kA. It has a nameplate capacity of 250,000 tpy. In four of the five potlines, the facility produced primary aluminum at 99.9% purity, which is primarily used in the aerospace and defense industries, supplying Airbus, the U.S. Navy, and the International Space Station.³ The Hawesville smelter was fully curtailed in August 2022 and hasn’t restarted since. The operational pause resulted in the layoff of 628 employees.

Magnitude 7 Metals

The Noranda Aluminum smelter located in New Madrid, MO, started production in 1971. The smelter has two potlines of Kaiser P-69 cell technology, with 348 cells that operated at 175 kA, and one potline of Alcoa A697 cell technology, with 160 cells that operated at 210 kA. The smelter has a nameplate capacity of 263,000 tpy (Figure 6). In 2016, all three potlines at Noranda smelter were shut down due to the failure of the plant’s electrical switch gear, which eventually caused the closure of the smelter.

Noranda Aluminum sold the New Madrid smelter to ARG International AG for a purchase price of $13.7 million in September 2016 in the hopes of resurrecting the facility. Renamed Magnitude 7 Metals, the smelter restarted potlines 1 and 2 in 2018, following the implementation of the U.S. Section 232 tariffs. However, on January 25, 2023, the smelter announced it was permanently closing due to high energy costs. Magnitude 7 Metals produced about 20% of the total aluminum made in the U.S. before stopping operations on January 28, 2024.

U.S. Secondary Aluminum Production

One straightforward way to address aluminum’s energy and emissions problem is to boost recycling rates. Turning old soda cans and scrap metal back into fresh aluminum requires about 95% less energy, compared to primary aluminum production. But to make recycled or secondary aluminum, producers still need to add 10–40% primary aluminum to the scrap mix to achieve the right amount of strength and durability. As a result, the secondary aluminum industry is one of the biggest buyers of primary aluminum.

In terms of domestic production, the decline in primary production is being more than offset by investment in recycling capacity. Secondary aluminum production has grown steadily from 1 million tonnes in 1973 and 2 million tonnes in 1990 to above 3.3 million tonnes in 2021 (Figure 7), accounting for 78% of all the aluminum produced in the country. The U.S. secondary aluminum industry showed an increase in employment, with 8,691 jobs in 2002 increasing by +7.3% to 9,329 jobs in 2022.¹ These large increases in secondary production are likely due to the startup of new secondary aluminum facilities.

The U.S. secondary aluminum segment is now significantly larger than the primary segment. According to the Bureau of Labor Statistics, there were 113 facilities engaged in secondary production as of 2020. This figure includes facilities that recover aluminum and aluminum alloys from scrap, as well as those that manufacture alloys, powder, paste, or flake from purchased aluminum.

In 2023, the U.S. produced 3.3 million tonnes of secondary aluminum, and secondary production accounted for 81% of total U.S. aluminum production, compared to about 33% globally. The U.S. share of global aluminum production was 3.9% in total, with 1.1% for primary production and 9.4% for secondary production. In 2023, the U.S. exported 3.3 million tonnes of aluminum and imported 5.54 million tonnes, resulting in net imports of 2.24 million tonnes.⁴

Future Trends

Increasing Demand

According to CRU International, aluminum demand is forecast to grow by 33.3 million tonnes in the following decade, going from 86.2 million tonnes in 2020 to 119.5 million tonnes in 2030.⁵ Around 37% of this growth is expected to come from China, followed by 26% from Asia (excluding China), 15% from North America, and 14% from Europe.

North America is expected to reach a demand of 16.6 million tonnes in 2030, which represents a 45% increase from the 11.5 million tonnes consumed in 2020. The biggest share of this aluminum demand comes from the semi-finished products consumption for the transportation sector (4.2 million tonnes), which represented 37% of the region’s demand in 2020. The U.S. wind and solar industries will need 7.8 million tonnes of aluminum per year in the coming years, which significantly exceeds expected U.S. aluminum production by 2035.

China’s Surging Growth in Secondary Aluminum

In addition to being the world’s largest producer of primary aluminum, China is also the world’s largest producer of secondary aluminum, with an estimated annual capacity of 14 million tonnes. However, capacity utilization has hovered between 40% and 60% in recent years, meaning that China only produces approximately 6–8 million tonnes of secondary aluminum annually. China’s secondary aluminum production in 2023 was estimated to be 18.8 million tonnes, a 31% increase from the previous year.

Recycling domestic aluminum scrap to produce secondary aluminum is an inevitable trend in China, largely due to the shortage of its bauxite resources. The country’s primary aluminum production is estimated to reach its peak around 2025, and its primary production capacity will gradually decrease as it is replaced by the growth of secondary aluminum in China.⁶ However, secondary aluminum in China is expected to exceed the production level of primary aluminum for the first time at around 2035 and will eventually account for more than 60% of the total aluminum output. The Chinese Communist Party expects secondary aluminum production to grow to 11.5 million tonnes per year by 2025 and 18 million tonnes per year by 2030.⁷

Federal Programs for U.S. Primary Aluminum

Barring an emergency intervention from the U.S. government, it’s not clear whether U.S. aging primary smelters are going to continue to be part of future production. While the Inflation Reduction Act is aimed at boosting the U.S. renewable energy sector and includes tax credits for producing primary aluminum, there appears to be no over-arching strategy on how to link the two. An action plan providing for the modernization of aging facilities and a tie-in with renewable energy needs to come sooner rather than later if the remaining U.S. smelters are going to survive.

However, one positive development is in the works. Century Aluminum plans to construct the first new U.S. primary aluminum smelter in 45 years, based on up to US$500 million in funding from U.S. Department of Energy’s Office of Clean Energy Demonstrations program.⁸ Century plans to construct its Green Aluminum Smelter Project at a site within the Ohio/Mississippi River Basins. The smelter would avoid an estimated 75% of emissions from a traditional smelter due to the implementation of state-of-the-art, energy-efficient design and the use of carbon-free energy. This smelter is also expected to create more than 1,000 full-time jobs represented by the United Steelworkers, and over 5,500 construction jobs. According to Century, the project would double the size of the current U.S. primary aluminum industry, if completed.

Canadian Aluminum Production

The Canadian government announced a plan to impose a 25% tariff on certain aluminum and aluminum products imported from China, which became effective in October 2024.^9,10 The decision followed recent action in the region to address unfair trade practices that have long impacted domestic aluminum producers, including increased monitoring and enforcement and tariffs on imports of unfairly traded metal from China, Russia, and elsewhere.

Tariffs on non-friendly countries have benefited the likes of Canada, which has historically been the single largest supplier of primary aluminum to the U.S. marketplace (4.8 million tonnes in 2023). Canada is considered to be part of the U.S. defense industrial supply chain. Alcoa and Rio Tinto’s string of smelters over the border are powered by green hydroelectricity. Rio Tinto is continuously upgrading its plants, most recently announcing the expansion of its modern-technology AP60 smelter to offset the phase-out of the older Arvida plant on the same site. Rio Tinto also modernized the Kitimat Aluminum Smelter in British Columbia, with 360 state-of-the-art AP-4X pre-bake smelting cells in 2015, which are powered by renewable hydropower generated by its own power system. The Aluminum Association applauded Canada’s aluminum tariffs, highlighting the importance of Canada’s primary aluminum industry to the downstream industry in the U.S.

References

1. “U.S. Aluminum Jobs & Economic Impact Steady Through COVID-19 Pandemic,” The Aluminum Association, March 31, 2022.
2. Pawlek, R.P., “Primary Aluminum Smelters of the World,” Light Metal Age, February 2023, pp. 6-21.
3. Tabereaux, A., “Century Aluminum Expands with Acquisition of U.S. Aluminum Smelters,” Light Metal Age, February 2015, pp. 22–25.
4. “U.S. Aluminum Manufacturing: Industry Trends and Sustainability,” Congressional Research Service Reports, October 26, 2022.
5. “Opportunities for Aluminum in a Post-Covid Economy,” International Aluminium Institute, January 28, 2022, CRU Reference: ST2342-21.
6. Li, Yun, et al., “When will the arrival of China’s secondary aluminum era?” Resources Policy, Vol. 65, March 2020.
7. Stadele, Chris, “Growing Secondary Aluminum Supply Could Further Weigh on Prices,” AEGIS Hedging, August 24, 2023.
8. “Century Aluminum Selected by U.S. Department of Energy to Receive $500 Million Investment to Build New Green Aluminum Smelter to Accelerate Industrial Decarbonization,” Century Aluminum, March 25, 2024.
9. “Targeted Canadian Tariffs on Chinese Aluminum Imports a Win for North American Manufacturing,” The Aluminum Association, August 26, 2024.
10. “Final list of steel and aluminum products from China that will be subject to a 25 percent surtax,” Department of Finance Canada, October 1, 2024.

Dr. Alton Tabereaux is a technical consultant in resolving issues and improving productivity at aluminum smelters since 2007. He worked for 33 years as a manager of research and process technology for both Reynolds and Alcoa Primary Metals. He was recipient of JOM Best Technical Paper Award in 1994 and 2000, editor of Light Metals in 2004, and received the TMS Light Metals Distinguished Service Award in 2007. He has been a lecturer at the annual International Course on Process Metallurgy of Aluminium held in Trondheim, Norway, and an instructor at the annual TMS Industrial Aluminum Electrolysis Courses. He has published over 65 technical papers and obtained 17 U.S. patents in advances in the aluminium electrolysis process. He participated as a consultant in an EPA sponsored “Asian-Pacific Partnership” program to minimize perfluorocarbon (PFC) emissions generated during anode effects in the electrolytic cells at aluminum smelters in China.

Editor’s Note: This article first appeared in the February 2025 issue of Light Metal Age. To receive the current issue, please subscribe.

Editor’s Note (3/19/2025): Under the section “Historical Perspective,” in the first two paragraphs, the text incorrectly listed the specific production values for U.S. aluminum production in 1900, 1913, 1915, 1939, and 1943 as being over a “million” tonnes. However, the actual production data for this period was actually less than 1 million tonnes. The text has been updated to accurately reflect this correction.