US Aluminium Ingot Price Experiences Growth Amidst Plunging Supply and Lowered Production Rate
- 08-Feb-2024 2:21 PM
- Journalist: Francis Stokes
In the first week of February 2024, the price of Aluminium Ingot increased in the US spot market as the production rate declined, indicating a lowering of the supply rate. The inventories shifted downward as the Aluminium smelters started shutting down their operations. Meanwhile, the trade disruption through the Suez Canal route has led to a reduction in trade activity from the overseas Asian market. The buyers the rising trend for the price of Aluminium Ingot to hold in the US region for the upcoming weeks.
The US Aluminium Ingot industry was facing a downgrading situation, due to the dual impact of elevated electricity prices, being the primary cost factor in electrolysis production; coupled with substantial exports from China at a cheaper rate. These factors affected the production rate and sales of the domestic Aluminium Ingot in the US spot market. As a ripple effect of the declining trend, the production of Aluminium Ingot in the US region has declined. The previously lingering decline in the Aluminium Ingot demand provoked the major Aluminium smelters to shut down their operations. Several major Aluminium smelters such as Intalco smelter in Washington, Hawesville smelter in Kentucky, Warrick plant in Indiana, and many others have either lowered their production rate or have completely shut down their sites since 2022, due to the declining profits in the USA. Due to these factors, the Aluminium Association of Canada (AAC) has added Aluminium to Quebec’s list of critical and strategic minerals.
Furthermore, Federal and state officials are currently engaged in initiatives aimed at reopening the dormant aluminum facility located in Marston, southeastern Missouri. The closure of the plant was announced by Magnitude 7 Metals, resulting in the termination of its workforce by the end of January this year. The company attributed the closure to unusually cold weather conditions and insufficient financial resources to sustain operations. This resulted in reduced Aluminium Ingot output through the USA-based market. Additionally, the production curtailment in the New Madrid smelter in Missouri has been counted as the recent steps taken to slow the production rate of Aluminium Ingot. New Madrid mill exemplified the implementation of import tariffs during the Trump administration. Despite the tariffs and the significant investments by the Biden administration aimed at reviving domestic critical minerals supply chains failed to secure its future. The tariffs implemented by Trump to revitalize the enduring decline of the Aluminium Ingot sector in the U.S. have yielded negligible enduring effects.
According to ChemAnalyst, the rising risk of supply shortage amidst plunging output from domestic Aluminium smelters would keep the price of Aluminium Ingot on a rising trend. The Aluminium Ingot demand from the Green Energy sector is expected to increase in the upcoming weeks for the first quarter. Meanwhile, mills push their price to gain profits as the inventory level lowers in the US spot market.