Power trumps tariffs as another US aluminium smelter shuts

SEATTLE (Scrap Monster):  U.S. import tariffs haven't been enough to stop the United States losing another aluminium smelter, leaving the country with just five primary metal production plants.

Century Aluminum suspended production at its Hawesville smelter in 2022 as energy prices spiked in the wake of Russia's invasion of Ukraine.

The company expected to resume operations within a year once power prices abated. But they didn't, and Century has now sold the Kentucky site to digital infrastructure company TeraWulf 

Aluminium smelters are massive users of energy, with a modern plant using more power than a city the size of Boston.

So too are data centers and in the battle for long-term power supply, Big Tech is prepared to pay more.

HALTING THE SLIDE

U.S. President Donald Trump hiked aluminium import tariffs to 50% last year with the stated goal of halting the decades-long slide in domestic primary metal capacity.

The immediate impact has been limited to Century's restart of 50,000 metric tons of annual capacity at its Mount Holly smelter in South Carolina. Tariffs helped, but an extension, opens new tab of the current power supply deal with local energy provider Santee Cooper was arguably more important.

The plant is due to return to near-capacity utilisation of 220,000 tons per year by the middle of 2026.

The future promise is a state-of-the-art greenfield smelter in Oklahoma, a 60:40 joint venture between Emirates Global Aluminium and Century.

The partners have just selected U.S. engineering group Bechtel to prepare preliminary studies for the proposed plant, which would have annual capacity of around 750,000 tons.

Oklahoma has the advantage of producing three times more energy than it consumes. But a power supply deal for the proposed new plant is still pending and even assuming construction can start on schedule by the end of this year, first metal production is likely only in 2030.

LOSS OF CAPACITY FLEX

The permanent closure of Hawesville significantly reduces the amount of remaining idled capacity that could be reactivated to fill the gap in the years before the new Oklahoma smelter comes online.

Hawesville was not only the second-largest remaining smelter in the U.S. with annual capacity of 252,000 tons, but also a significant supplier of high-purity aluminium used in aerospace and defence applications.

Alcoa still has one 54,000-ton-per-year production line idled at its Warrick facility in Indiana, but seems to be in no rush to restart it.

Reactivation would cost around $100 million and would take a couple of years, "so it's, at this point, unlikely we would restart," Alcoa President and CEO William Oplinger told analysts, on the company's Q4 2025 results call last month.

That leaves just the New Madrid smelter in Missouri, which was reactivated in 2018 but closed again in 2024.

Tariffs have rekindled hope that the 263,000-ton-per-year plant could return to life but, as with Warrick, it would be costly and would take time.

 Courtesy: www.techxplore.com