Aluminum industry shifting back to value-added as demand returns
- July 29, 2020
The group is forecasting a 30 per cent drop in July as the industry's exports to the U.S. of standard P1020 aluminum, dropping to 112 kilotonnes compared to June’s 155 kilotonnes. This follows an initial reduction of 16 per cent in June shipments compared to May.
Production at smelters in North America shifted towards P1020 during first half 2020 in place of Value Added Products (VAP), as demand from the auto sector for these products dropped due to COVID-19.
Demand for Value Added Products is now restarting, allowing Canadian smelters to rebalance their production.
"We are seeing a clear shift as production rebalances after producers [moved] from value-added products as a result of the economic reactions from COVID-19,” said Jean Simard, President and CEO of the Aluminium Association of Canada.
He says producers are beginning to shift back more value-added products (VAP) and away from the commodity-grade ingot that was being exported as a response to reduced demand from the automotive sector as a result of COVID-19.
"Any move to introduce measures such as tariffs by the US government will only increase the prices being paid by North American manufacturers and the consumers who buy their products, while making room for metal from other countries like Russia and China."