The price of aluminum is 40 percent of what it was five years ago. Fewer American manufacturers are producing it due to global competition many describe as being at an unfair advantage.
The ripple effect? The U.S. is importing more aluminum than ever, causing hundreds of people in the Tri-State to lose their jobs.
Working conditions? Inches from 2,500 degrees. But the real heat they’ll say is economics.
“It’s quickly becoming too late for American aluminum,” says Century Aluminum Plant Manager Jared Brooks.
Century Aluminum’s Hawesville smelter is one of five remaining in the United States. 20 years ago, there were 25. Competitor Alcoa shut down its Warrick facility in March. Operations at this plant is 40 percent of what it was last year.
“There’s a glut of metal in the world market now especially from China and it’s subsidized metal that a foreign government helps shore up their industry and it makes it non competitive for virtually any other industry to compete, you can’t compete with a government, it’s unfair,” says Brooks.
In 2011, the London Metal Exchange listed aluminum at $2,500 a ton. China’s cheap labor drove down the price to $1,500 dollars and exporting to the U.S. where aluminum is more expensive to produce. Calls are growing louder for the federal government to intervene.
“Whether it’s commerce regulation, a tariff, upholding the law, upholding the standards where it makes it viable for any company to succeed in this world market. This smelter makes the purest aluminum in the world period and it’s very important for this country in the essence of national defense and we’re very proud of it,” says Brooks.
Century Aluminum extracts its alumina from a mine in St. Ann, Jamaica. It’s refined in Gramercy, Louisiana, then shipped to Hawesville where it’s smelted into sows. Each sow weighs 1,500 pounds and is used in everything from the auto industry, aerospace, even power lines.
“It’s a critical time in the aluminum industry for us to garner support and stop this influx of metal harming our economy and taking these good industrial, what America is known for, jobs away from us,” says Brooks.
Up until 2015, 650 people worked at the Hawesville smelter. Only 250 remain such as potline supervisor Dustin Stevens, whose dad and brother lost their jobs last year.
“If we don’t have something happen with the L.M.E., all our jobs are in jeopardy,” says Stevens.
“Century Aluminum, we’ve been handling their scrap for years. Over the last 15 years they were probably our top scrap producer, and now they’re not in our top five,” says Brandon Morgan of Henry Fligeltaub Recycling.
The downturn in aluminum, far reaching in the Tri-State. Evansville’s Henry Fligeltaub reports the recycling business is down as much as 60 percent.
“Manufacturing slowed, manufacturing is leaving the country, businesses are doing things differently, they’re using less scrap. It’s just been difficult,” says Morgan.
Most of the aluminum you see here, comes from area manufacturers and then sent to the Wipaca Foundry in Tell City. Just like Century Aluminum, the family business is being burned by China.It was once a huge importer of American aluminum, especially in its preparation for the 2008 Beijing Olympics.
“Now they’ve got steel mills running, they’re making finished goods, they’re making products as well they’re putting out all over the world,” says Morgan.
Very few scrappers are selling the commodity. The gas money is often not worth it.
“There might be 5 to 10 dollars of aluminum on there now where there was 20 dollars a while back,” says scrapper Brock Wells.
Every aspect of the recycling business is down, a lot of industries interconnected, even coal, for instance this pile of material here, used to be in a mine.
“Oil that’s basically another driver that basically took this market down, was the fact oil prices dropped, they don’t make as much, they don’t need steel, the mining operations are drying up everywhere so they don’t need equipment, they don’t need product, we’re all intertwined with commodities,” says Morgan.
Smelting aluminum takes a lot of power. Plant Manager Jared Brooks says Hawesville alone uses as much electricity as the entire city of New Orleans. But local coal is getting harder to come by, putting U.S. aluminum manufacturers at even greater disadvantage as insiders say China also subsidizes electricity.
The U.S. International Trade Commission recently announced it’s opening an investigation into the global aluminum trade and its impact on the U.S. aluminum industry, specifically foreign government policies that drive overproduction, such as China.
It’s expected to deliver its report to the House Ways and Means Committee in June 2017.