US aluminium industry faces crisis as smelter closures undermine tariff protections

Trade groups representing US steel and aluminium producers have welcomed decisive trade actions, including tariffs, arguing they are necessary to counter unfair competition. However, the CEO of the Aluminum Association has acknowledged a harsh reality, “There is not enough smelting capacity in the United States to supply the growing aluminium industry with the input materials it needs.”

The closure of the New Madrid smelter in Missouri in early 2024 underscored the sector’s fragility. As the second-largest smelter in the US, it accounted for nearly 30 per cent of domestic primary aluminium production, with an annual capacity of 263 thousand tonnes. Its shutdown reduced US primary aluminium smelting capacity by nearly one-third, highlighting the industry’s vulnerability.

Energy costs remain a decisive factor. Century Aluminum’s Mt Holly smelter has been operating at 75 per cent capacity since 2021 due to high power prices, while its Hawesville plant in Kentucky shut down in July 2022 for the same reason. The Warrick smelter in Indiana, once capable of producing 269 thousand tonnes annually, has been running only two of its production lines since mid-2022.