As a corollary of sorts to my colleague Stuart’s earlier look at the Chinese aluminum market, a quick word about the US aluminum market picture. The Aluminum Association presented a Q3 2011 update last week on aluminum highlights, and the dominant (and rather positive) theme centered on exports.
The Aluminum Association’s Nick Adams said that the US is now “essentially a net exporter, which hasn’t happened in a long time. He makes his case citing the uptick in exports within the sheet and plate markets — up 36 percent in 2011 to date, compared with the same period in 2010.
Also, Adams said the “huge growth in export numbers for extrusion markets is notable, up nearly 38 percent in 2011 to date. For the same period, US and Canada aluminum exports overall, less cross-border trade, is up 22.5 percent, whereas imports are up by only 4.8 percent.
Ultimately however, according to one slide — unless I’ve missed something — the numbers don’t really add up in terms of the US being a net aluminum exporter:
Source: Aluminum Association
Seems as though Adams was speaking more to the fact that net imports have fallen significantly in 2011 so far, as compared with the 2010 market. He also mentioned higher exports of scrap to the Far East. (But other graphs still showed considerable growth in the US’ imports of Chinese sheet and foil in the past several months of 2011, while US exports of sheet and extruded shapes to Mexico — the largest market for those forms — remained flat and dropped, respectively, since this past summer.)
Auto Sector Continues Driving the Domestic Market
Obviously, transportation is still the big driver right now in terms of demand and production. Representing the largest number of shipments by end-use market in 2010 at 26 percent, transportation’s positive position is buoyed by North American light vehicle production. According to Ward’s data, Oct. 2011 production for the US, Canada and Mexico totaled 1,242,865 units, a 12% year-on-year increase. Year-to-date production totals 10,893,306 units, up 8.3 percent on 2010 numbers.
The November US auto sales figures, which came out late last week, showed nearly a 14 percent increase year-on-year, while the year-to-date sales were up 10.4 percent compared to 2010.
What To Expect
But will overall demand for aluminum continue? The other macro viewpoints reinforced by Tim Hayes, an analyst for Davenport and Company, global market and domestic economies, pointed to more positivity.
Hayes said that his data show the US is not in a recessionary period in the least, contrary to what the media has been reporting. He pointed to real domestic GDP numbers (up 2 percent in Q3), industrial production and factory output (up 0.7 and 0.5 percent, respectively, in October) and (very) slight glimmers of hope in the construction markets.
Hayes still sees aluminum demand up 10 percent next year, while global supply will clock in at about 8 percent. There will be risks of greater smelter cuts than previous analysis showed, he also said, given the lower aluminum prices.