The Aluminum Association outlined the pathways to move the U.S. industry toward greater self-sufficiency in its domestic aluminum supply. The pathways are presented in a a new white paper, Powering Up American Aluminum: A Roadmap for Next Generation Supply Chain Resilience, which the Asssociation developed in collaboration with Wittsend Commodity Advisors.
According to the Association, the U.S. aluminum industry has evolved over the last quarter century and shifted its business to become a global powerhouse in mid-and-downstream aluminum production and recycling — investing more than $10 billion in U.S. operations over the past decade. At the same time, steady demand growth and a declining primary aluminum production footprint within the U.S. has led to a gap of around 4 million tonnes of raw (or unwrought) aluminum that the industry must import — largely from long-time trading partner Canada.
Supply Chain Pathways
Achieving U.S. aluminum self-sufficiency will require time, money, and commitment from both the public and private sector to build new smelters and recycle more aluminum. The white paper focuses on three main pathways to address industry metal supply, including expanding primary aluminum production, increased domestic scrap recovery, and importing metal from Canada and other trusted trade partners.
1. Build New or Restart Idled Primary Aluminum Smelters
Slightly less than half of installed U.S. primary aluminum capacity is currently in operation (thanks to historic decline).
Bringing this metal back online from four 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 metric ton metal supply gap.
There are also significant opportunities to build new aluminum smelting capacity in the U.S. Two projects that are currently under discussion, including Century Aluminum’s plan to construct a smelter with DOE funding and Emirates Global Aluminium’s reported investment plan to build a new U.S. smelter. Building such facilities will take time (5-6 years), significant capital investment ($4-6 billion per 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 U.S. would need to build around five 750,000 tonne smelters. Currently, the largest fully operational smelter in the U.S. right now produces only 220,000 tonnes.
Enormous electricity requirements for primary aluminum production poses a unique challenge for industry self-sufficiency. A single new aluminum smelter uses ~11 TWh — a similar amount of electricity used by a major U.S. 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 U.S. will have an energy deficit ~ 50 TWh by 2035, based on current trendlines.
2. Recover and Recycle More Domestic Aluminum Scrap
While domestic primary production has declined over recent decades, recycled (or secondary) aluminum production has grown, hitting record levels in 2024. Recycling aluminum is about 95% less energy intensive than primary production and relies largely on scrap aluminum as an input material. Building aluminum recycling facilities is also far less capital intensive. New sorting technologies could unlock even more available scrap aluminum. Collecting and recycling the estimated 1 – 2 million MT of usable scrap currently landfilled or exported would meet 25% – 50% of the existing U.S. metal supply gap.
3. Import Metal from Trusted Partners
As the industry works to produce more domestic aluminum, access to affordable, reliable Canadian primary aluminum is a vital bridge for metal supply and a good deal for America. The aluminum the U.S. 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. Aluminum smelters in Canada typically pay $25-40 per MWh of electricity versus $60-80 per MWh in the U.S. In addition, every one aluminum smelter job in Canada supports about 13 U.S. aluminum jobs further downstream.
Conclusion
“Aluminum 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 aluminum smelter tomorrow, the U.S. 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 U.S. manufacturers have abundant, affordable metal.”
The Aluminum Association is calling on policymakers to support the Aluminum Agenda on areas like energy, trade and recycling policy to increase American self-reliance in this critical sector of the manufacturing economy.