New capacity comes online as forecasts indicate aluminum demand growth
Rio Tinto’s new remelt furnace at its Laterrière Plant in Quebec officially came online amid a tight aluminum market and elevated aluminum prices.
Rio Tinto projects boosts aluminum recycling capacity
The two-year project added 22,000 metric tons of recycling capacity for North American rolled product customers in the automotive and packaging industries.
According to Rio Tinto, the new facility will offer its customers “an additional solution to recycle scrap from their manufacturing processes and turn it into high quality, low carbon aluminum alloys.”
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Alcoa aluminum smelter’s road to recommissioning
Meanwhile, the currently idled Alcoa Intalco Works smelter faces one remaining hurdle for its recommissioning.
The smelter and its prospective owners secured taxpayer funding to update the facility. Washington Gov. Jay Inslee signed into law a state construction budget with the $10 million line item to improve efficiency and reduce emissions at the Ferndale facility.
A restart of the smelter remains in limbo, however. The prospective buyer, Blue Wolf Capital, still must establish a preferential long-term power contract with the Bonneville Power Administration (BPA). BPA previously rejected a proposal for reduced-rate electricity at the facility. However, negotiations are ongoing.
The required industrial rate is about 50% less than the current market rate. Should Blue Wolf Capital secure a contract, the smelter could return online as early as this summer, according to one report.
Alcoa idled the facility in the spring of 2020. Plummeting metal prices eroded the smelter’s profitability.
The current tight aluminum market, however, incentivizes its return. Specifically, Intalco’s annual capacity of 240,000 metric tons could replace U.S. imports of unwrought aluminum from Russia. Those imports reached roughly 215,000 tons in 2021.
Keep an eye out for the full Monthly Metals Index (MMI) report later this week, which includes analysis of aluminum prices and aluminum market trends.
Rising demand
New capacity from the sector comes alongside growing global aluminum demand.
According to the International Aluminum Institute (IAI), from 2020 to 2030, forecasts for aluminum demand see nearly 40% growth. The transportation sector, specifically the transition to electric vehicles, will drive the lion’s share of that demand. The sector is projected to consume 31.7 million tons in 2030, up from 19.9 million tons in 2020.
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