ISRI Spotlight: Downturn in Automotive Sector to Weigh on Aluminum

SEATTLE (Scrap Monster): The Institute of Scrap Recycling Industries (ISRI) Spotlight on Aluminum discussed challenges faced by the metal market. The speakers at the virtual event focused on the impacts caused by Covid-19 pandemic and Section 232 tariffs on the aluminium scrap sector.

According to Jason Schenker, chairman of The Futurist Institute, the auto sales are expected to remain weak during the rest of the year. The aluminium demand from automotive sector is expected to remain weak, whereas increased non-durable goods consumption is likely to lend support to the sector. The aluminium and metals demand in emerging markets are likely to remain flat next quarter, he said.

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John Woehlke of JW Metal Consulting, Nashville, Tennessee stated that the fundamentals for aluminium don’t look great. The exemptions by the Department of Commerce (DOC) have nearly nullified the Section 232 tariffs announced by the Trump administration.

The lack of protection for can sheet poses risks to scrap industry. Although there has been notable growth in domestic demand for can sheets in the U.S., the growth of imported sheets have prevented domestic producers from taking advantage of the situation, Woehlke said. The declining automotive demand may likely impact cast aluminium, he added.