The US needs more aluminium and it needs it now

The US government is grappling with a critical shortage of aluminum, a material crucial for various defense applications. President Donald Trump recently highlighted this issue during a virtual rally, emphasizing the need for increased aluminum production. One promising project is a $500 million joint venture between Century Aluminum and Emirates Global Aluminium (EGA) near Oklahoma.

However, even with construction set to begin soon, the plant won't start producing high-purity aluminum (HPA) until at least three years from now.

The Department of Defense (DoD) conducted a wargame last year to assess the country's aluminum resilience. They found that while new smelters, revamping old ones, and recycling more would improve overall aluminum industry outcomes, none of these measures would meet the DoD's short-term aluminum and HPA requirements within two years. HPA is particularly concerning for the Pentagon, as it's a vital component in some of their essential systems and is currently sourced primarily from the United Arab Emirates.

The loss of production in the Gulf, following an Iranian attack on EGA's Al Taweelah smelter in March, has intensified the US's reliance on imports. The Pentagon's HPA headache is part of a larger issue, as restoring US aluminum production capacity is a long-term task. However, the market urgently needs more aluminum now due to the impact of tariffs on domestic production.

The US remains the largest supplier of primary aluminum to its domestic market, but even Canada, its primary supplier, won't be able to fill the shortage. The US government has proposed a reduced 25% import tariff for anyone building, expanding, or refurbishing domestic smelter capacity, but even then, the US would still face a high premium for aluminum imports.