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News Release 17-093
Inv. No(s). 332-557
Contact: Peg O'Laughlin, 202-205-1819
The U.S. primary unwrought aluminum segment shrank significantly during 2011-15, while facing declining prices, relatively high production costs (i.e., electricity), and limited investments in smelting technologies, reports the U.S. International Trade Commission (USITC) in its publication Aluminum: Competitive Conditions Affecting the U.S. Industry.
By contrast, the domestic secondary unwrought and wrought product segments expanded during the period, as secondary producers benefitted from access to abundant, low-cost aluminum scrap (their main input) while wrought producers took advantage of proximity to and close collaboration with their customers in the large and growing U.S. market, according to the report.
The USITC, an independent, nonpartisan, factfinding federal agency, conducted the investigation at the request of the U.S. House of Representatives Committee on Ways and Means.
As requested, the USITC report provides information on the relevant factors affecting the global competitiveness of the U.S. aluminum industry. The report focuses on the years 2011–15, though it also documents trends occurring from 2001, where appropriate. The report also assesses the strengths and weaknesses of major aluminum producing and exporting countries, provides qualitative and quantitative assessments of the impact of foreign government policies, identifies countries where primary unwrought aluminum capacity has substantially increased, and includes information on trade flows of aluminum through third countries. Other highlights of the report include:
- Global production of primary aluminum and wrought aluminum each rose by roughly 25 percent during 2011–15, driven largely by the dramatic growth of China’s output and consumption.
- Export restraints significantly limited China’s exports of unwrought aluminum during 2011-15, while established suppliers such as Russia, Canada, Norway, and Australia continued as the world’s leading exporters. By contrast, China strengthened its position as the world’s leading exporter of wrought aluminum, followed by Germany and the United States.
- The global primary aluminum market experienced severe price declines during 2011–15 due to oversupply and falling production costs, which produced divergent responses from producers. The United States shed 19 percent of its primary aluminum capacity between 2011 and 2015, while Europe lost 11 percent over this period. In contrast, China and the Gulf Cooperation Council countries expanded their capacity by more than 40 percent, despite the declining global prices over this time period.
- The global aluminum industry is characterized by extensive government policies that affect all segments of the supply chain but are principally aimed at lowering production costs for primary unwrought aluminum.
- The chief determinant of competitiveness for most primary aluminum producers is low electricity costs. For secondary and wrought producers, the determinants are reliable scrap supplies and proximity to end-use markets, respectively. However, China is a major exception to these patterns. Despite new investments in highly cost-efficient smelters during 2011–15, China remained a relatively high-cost producer of primary aluminum and a leading player in secondary and wrought production despite lacking long-established end-markets.
Aluminum: Competitive Conditions Affecting the U.S. Industry (Investigation No. 332-557, USITC publication 4703, June 2017) is available on the USITC's Internet site at https://www.usitc.gov/publications/332/pub4703.pdf.
USITC general factfinding investigations cover matters related to tariffs or trade and are generally conducted at the request of the U.S. Trade Representative, the House Committee on Ways and Means, or the Senate Committee on Finance. The resulting reports convey the Commission's objective findings and independent analyses on the subjects investigated. The Commission makes no recommendations on policy or other matters in its general factfinding reports. Upon completion of each investigation, the USITC submits its findings and analyses to the requester. General factfinding investigation reports are subsequently released to the public, unless they are classified by the requester for national security reasons.