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Aluminum Prices Spike Up 62% and Will Continue Rallying in 2022


Aluminum Prices Spike Up 62% and Will Continue Rallying in 2022

IndexBox has just published a new report: ‘World – Aluminum – Market Analysis, Forecast, Size, Trends and Insights’. Here is a summary of the report’s key findings.

Throughout this year, global aluminum prices continuously grew and gained 62% in October 2021 compared to the same period of 2020. China’s output has decreased due to restrictions on energy usage and halted production at a 300K-ton capacity factory in Yunnan province. Consequently, the average yearly price in 2022 is projected to rise by 6% y-o-y. Despite rising prices, the U.S., the world´s largest aluminum importer, expanded its purchases by 4.5% against 2020.

Key Trends and Insights

According to the World Bank data, the average aluminum price grew from $2004 per tonne in January 2021 to $2934 per tonne in October 2021, a 62% increase from the previous October ($1806 per tonne). Next year, aluminum prices are forecast to rise by 6% y-o-y because of a high demand from the automotive industry, increased prices of energy resources and a supply shortage arising from China diminishing production to decrease СО2 emissions.

As China limits the output, it must expand imports. From January through July 2021, China purchased 1.5M tonnes of aluminum from abroad which was 52% more than the same period in 2020. In monetary terms, throughout seven months, imports surpassed $3.3B, over twice the amount during the same period in 2020 ($1.6B). In November 2021, an explosion occurred at an aluminum factory in Yunnan province. This caused a complete stop in production for the 300K-ton-capacity factory and further exacerbated the supply shortage on the market.

The U.S. is the world’s largest importer of aluminum, and it also increased purchases this year. From January through September 2021, the U.S. imported 2.9M tonnes of the metal, a 4.5% gain in volume of shipments from the same period in 2020. In monetary terms, imports grew by 47%, reaching $7.8B.

Aluminum Exports by Country

Last year, aluminum exports worldwide reached 24M tonnes, flattening from the previous year. The total export volume increased at an average annual rate of +1.5% over the past decade. In value terms, aluminum exports declined from $47.9B in 2019 to $44.7B (IndexBox estimates) in 2020.

The most significant shipments were from Canada (2.9M tonnes), Russia (2.7M tonnes), the United Arab Emirates (2.2M tonnes), India (2.1M tonnes), Malaysia (1.5M tonnes), Australia (1.4M tonnes), Norway (1.1M tonnes), Bahrain (0.8M tonnes), the Netherlands (0.7M tonnes), South Africa (0.6M tonnes), China (0.6M tonnes) and Mozambique (0.5M tonnes), together accounting for 70% of total export. Germany (488K tonnes) followed a long way behind the leaders.

In value terms, Canada ($5.5B), the United Arab Emirates ($4.3B) and Russia ($4.2B) constituted the countries with the highest levels of exports in 2020, together accounting for 31% of global exports. These countries were followed by India, Malaysia, Norway, Australia, Bahrain, the Netherlands, China, South Africa, Germany and Mozambique, which together accounted for a further 41%.

In 2020, the average aluminum export price amounted to $1,847 per tonne, shrinking by -7.5% against the previous year. There were significant differences in the average prices amongst the major exporting countries. In 2020, the country with the highest price was Norway ($2,367 per tonne), while Russia ($1,568 per tonne) was amongst the lowest.

Source: IndexBox Platform

aluminium foil

EU Aluminium Foil Market Increased 0.3% to $5.2B

IndexBox has just published a new report: ‘EU – Aluminium Foil – Market Analysis, Forecast, Size, Trends and Insights’. Here is a summary of the report’s key findings.

In 2019, the EU aluminium foil market increased by 0.3% to $5.2B, rising for the third year in a row after two years of decline. The market value increased at an average annual rate of +1.1% over the period from 2009 to 2019; the trend pattern remained consistent, with somewhat noticeable fluctuations being observed in certain years. The most prominent rate of growth was recorded in 2011 when the market value increased by 19% against the previous year. As a result, consumption attained a peak level of $5.4B. From 2012 to 2019, the growth of the market remained at a somewhat lower figure.

EU Consumption by Country

The countries with the highest volumes of aluminium foil consumption in 2019 were Italy (275K tonnes), Germany (144K tonnes) and France (137K tonnes), with a combined 42% share of total consumption.

From 2009 to 2019, the biggest increases were in Italy, while aluminium foil consumption for the other leaders experienced more modest paces of growth.

In value terms, Italy ($872M), Germany ($697M) and France ($485M) were the countries with the highest levels of market value in 2019, together comprising 40% of the total market. These countries were followed by the UK, Spain, Poland, Belgium, the Netherlands, the Czech Republic, Sweden, Austria and Greece, which together accounted for a further 44%.

The countries with the highest levels of aluminium foil per capita consumption in 2019 were Belgium (5.57 kg per person), Italy (4.62 kg per person) and Sweden (3.82 kg per person).

Market Forecast to 2030

Driven by increasing demand for aluminium foil in the European Union, the market is expected to continue an upward consumption trend over the next decade. Market performance is forecast to decelerate, expanding with an anticipated CAGR of +1.7% for the period from 2019 to 2030, which is projected to bring the market volume to 1.6M tonnes by the end of 2030.

Production in the EU

Aluminium foil production rose to 1.3M tonnes in 2019, picking up by 1.5% on 2018. The total output volume increased at an average annual rate of +1.3% over the period from 2009 to 2019; the trend pattern remained relatively stable, with somewhat noticeable fluctuations being observed in certain years. The pace of growth was the most pronounced in 2010 when the production volume increased by 7.2% y-o-y. Over the period under review, production hit record highs in 2019 and is likely to see steady growth in the immediate term.

Imports in the EU

Aluminium foil imports expanded markedly to 1.2M tonnes in 2019, picking up by 8.2% against 2018.

In value terms, aluminium foil imports contracted to $4.6B (IndexBox estimates) in 2019. The total import value increased at an average annual rate of +2.0% over the period from 2009 to 2019; however, the trend pattern remained consistent, with somewhat noticeable fluctuations being recorded throughout the analyzed period. The pace of growth was the most pronounced in 2011 with an increase of 23% against the previous year. As a result, imports attained a peak of $5B. From 2012 to 2019, the growth imports remained at a somewhat lower figure.

Imports by Country

In 2019, Germany (176K tonnes), France (155K tonnes), Italy (128K tonnes), the UK (121K tonnes), Poland (89K tonnes), Belgium (81K tonnes), Spain (65K tonnes), the Netherlands (59K tonnes), Austria (42K tonnes), the Czech Republic (38K tonnes), Denmark (28K tonnes) and Hungary (26K tonnes) was the key importer of aluminium foil in the European Union, making up 88% of total import.

From 2009 to 2019, the biggest increases were in Italy, while purchases for the other leaders experienced more modest paces of growth.

In value terms, Germany ($845M), Italy ($498M) and the UK ($459M) appeared to be the countries with the highest levels of imports in 2019, with a combined 39% share of total imports. France, Poland, Spain, the Netherlands, Belgium, the Czech Republic, Austria, Hungary and Denmark lagged somewhat behind, together comprising a further 48%.

The Czech Republic recorded the highest growth rate of the value of imports, in terms of the main importing countries over the period under review, while purchases for the other leaders experienced more modest paces of growth.

Import Prices by Country

The aluminium foil import price in the European Union stood at $3,971 per tonne in 2019, dropping by -13.1% against the previous year. Over the period under review, import prices attained the maximum at $5,228 per tonne in 2011; however, from 2012 to 2019, import prices stood at a somewhat lower figure.

There were significant differences in the average prices amongst the major importing countries. In 2019, the country with the highest price was the Czech Republic ($4,973 per tonne), while Belgium ($2,775 per tonne) was amongst the lowest.

From 2009 to 2019, the most notable rate of growth in terms of prices was attained by the Czech Republic, while the other leaders experienced a decline in the import price figures.

Source: IndexBox AI Platform


Commerce Department Proposes New Aluminum Import Licensing System

On April 29, 2020, the Commerce Department (“Commerce”) published a notice in Federal Register announcing that it is proposing new regulations that would establish an Aluminum Import Monitoring and Analysis System. The program appears to be modeled after the Steel Import Monitoring and Analysis (“SIMA”) System, which has been in place since 2005. Under the new monitoring system, importers of aluminum products or their customs brokers will be required to submit information via Commerce’s online portal to obtain an auto-generated license after which the license number must accompany the entry documentation. Commerce is requesting comments from interested parties regarding this new scheme by May 29, 2020.

Commerce has indicated this new system is intended to allow the Department to monitor aluminum import levels and this data would be made available to the public. This new monitoring approach goes hand in hand with the Department’s continued multi-prong approach on tackling trade issues. An important aspect of the new program is that Commerce is permitted to review imports as part of the exemptions from Section 232 aluminum tariffs for Canada and Mexico. As part of the Section 232 exemption process, the U.S. may monitor for import surges and limit imports to historic quantities “without meaningful increases,” according to Commerce. Furthermore, the new system will “facilitate the monitoring of imports of aluminum articles, including monitoring for import surges,” according to Commerce.

Commerce plans for the proposed aluminum licensing and monitoring system to “operate in a similar way as the existing SIMA system and will be codified under 19 CFR 361.” The program will apply to all “basic aluminum products,” including “all-aluminum products currently subject to Section 232 tariff.” After registering, importers or their Customs brokers will be asked to provide for the following data elements for each shipment prior to filing the entry summary:

-Filer company name and address

-Filer contact name, phone number, fax number and email address

-Entry type (i.e., Consumption, Foreign Trade Zone)

-Importer name

-Exporter name

-Manufacturer name (filer may state “unknown”)

-Country of origin

-Country of exportation

-Expected date of export

-Expected date of import

-Expected port of entry

-Current HTS number (from Chapters 76)

-Country where aluminum was smelted and poured

-Quantity (in kilograms)

-Customs value (in U.S. $ amount).

Once submitted, the system will likely automatically generate an aluminum import license number. This number will have to accompany every entry for aluminum products covered by the licensing requirement. A single license can cover multiple products provided that certain pertinent information is the same for the entire shipment. If certain key information is deemed to not be sufficiently similar then separate licenses may be required for a single shipment. Commerce has already posted a sample copy of the proposed aluminum import license on its website.

Exemptions. There is also an exemption or modified reporting requirements for low-value entries. As of the drafting of this update, no import licenses would be required on informal entries of aluminum products which are normally entries under $2500. In addition, for those shipments containing less than $5,000 in aluminum, importers or brokers would be able to apply for a “Low-Value License”. This “Low-Value License” would be reusable and could be used in place of a single-entry license, according to Commerce.

FTZ Entries. There are no exceptions from license requirements under the aluminum licensing program. Even though FTZ entries are not considered a full CBP entry, Commerce would still require a license for aluminum shipped into a foreign-trade zone under this program. “Because a CBP entry number would not be available for shipments entering the FTZ, the license required for entry into the zone will not require the CBP entry number. As with steel, a separate license will not be required upon withdrawal from the FTZ.”

Validity: Aluminum import licenses can be applied for up to 60 days before the anticipated date of importation up to the date of filing of the entry summary and would be valid for 75 days. Commerce’s announcement clarifies that “The aluminum import license is valid for up to 75 days; however, import licenses that were valid on the date of importation but expired prior to the filing of entry summary data will be accepted”

Record Maintenance: The proposed rule indicates that “[t]here is no requirement to present physical copies of the license forms at the time of entry summary; however, copies must be maintained in accordance with CBP’s normal requirements.”

Non-Confidential Data: At this juncture, Commerce is soliciting comments on how to make available to the public the data it collects. Currently, it plans to only share “certain aggregate information” collected from license applications on its “aluminum import surge monitoring website,” including data on country of origin, country of smelt and pour, and import quantity and value. In addition, Commerce is going to consider all “other information including copies of the licenses and the names of importers, exporters, and manufacturers will be considered business proprietary information and will not be released to the public.” This would be consistent with the treatment of data under the steel monitoring program and in general with the treatment as business proprietary, all information collected as part of the entry summaries filed by importers.

Husch Blackwell recommends that companies that are engaged in the business of importing aluminum products categorized as “basic aluminum” or if the products are subject to section 232 duties that such companies analyze those imports and consider submitting comments. The time period to submit comments is extremely short, only 30 days, and therefore time is of the essence to ensure that comments can be prepared and filed on behalf of any interested party.


Nithya Nagarajan is a Washington-based partner with the law firm Husch Blackwell LLP. She practices in the International Trade & Supply Chain group of the firm’s Technology, Manufacturing & Transportation industry team

Cortney O’Toole Morgan is a Washington D.C.-based partner with the law firm Husch Blackwell LLP. She leads the firm’s International Trade & Supply Chain group.


Are Quotas Worse Than Tariffs?

Quotas Return

With all the focus on tariffs these days, it is easy to overlook the return of another tool used to limit imports: quotas.

Over a year ago, the Trump Administration used Section 232 of the Trade Expansion Act of 1962 to impose 25 percent tariffs on specified steel imports and 10 percent tariffs on specified aluminum imports. Three countries – South Korea, Brazil and Argentina – made agreements with the United States to apply quotas to their steel exports in lieu of the Section 232 tariffs. Argentina also agreed to quotas on its aluminum exports.

According to numerous reports, U.S. negotiators were seeking similar agreements with Canada, Mexico, Japan and the European Union (EU). In May 2019, however, the governments of the United States, Canada and Mexico announced that they had reached a deal to lift steel and aluminum tariffs without imposing quotas, choosing instead to adopt a monitoring system with the right to re-impose tariffs on these products if surges are detected in the future. This deal could be a template for agreements with Japan and the EU to address their steel and aluminum tariffs.

In ongoing Section 232 investigations, the administration is keeping quotas on the table in other sectors including autos and auto parts, uranium ore and titanium sponges.

The Difference between Quotas and Tariffs

Quotas and tariffs are both used to protect domestic industries by artificially raising prices in the domestic market. Their administration and effects, however, differ in specific ways. Quotas restrict the quantity of a good imported from another country. Tariffs are a charge levied on the value of goods imported from another country.

While tariffs generate revenue that is paid to the importing country’s treasury, the value of a quota, also called “quota rents,” generally goes to the foreign exporters who are able to sell goods subject to the quota at higher prices and collect higher per unit revenue. In both cases, domestic consumers in the importing country pay the costs of tariffs and quota rents. But with quotas, the government of the importing country receives no revenue.

Quotas can be much more complicated to administer than tariffs. Tariffs are collected by a customs authority as goods enter a country. With quotas, customs authorities must either monitor imports directly to ensure that no goods above the quota amount are imported, or can award licenses to specific companies, giving them the right to import the amount allowed under the quota. Quotas can also take the form of a voluntary export restraint (VER), where the exporting country administers the quota.

The Cost of Quotas

Costs and pricing under a tariff regime are more transparent and predictable compared to quotas. For example, if a good is subject to a 10 percent tariff, then the good should cost about 10 percent more than it did before the tariff was imposed. With a quota, the price of that same good can increase as long as demand for the good continues and the supply remains constrained. This can mean that quota rents are ultimately more costly to domestic consumers than a tariff. In this way, quota regimes may incentivize foreign producers to upgrade the quality of their exports, leading to more direct competition with domestic producers and a higher-price product mix for consumers.

On the other hand, if foreign producers export low-quality goods under a quota regime, prices and profits for both foreign and domestic producers of low-quality goods will rise because of quotas, while domestic consumers were forced to pay more for lower quality goods.

The General Agreement on Tariffs and Trade (GATT) prohibits quotas and other quantitative restrictions under Article XI (with specific exceptions including for “security reasons”) as the GATT parties agreed that quantitative restrictions were overly restrictive and distortive compared to duties or taxes, where are permitted.

Tricky to Administer

In the case of South Korea, Brazil, and Argentina and Section 232 quotas, each country agreed to product-specific absolute quotas on 54 separate steel articles based on each country’s average annual import volumes of steel from 2015 through 2017. Argentina also accepted product specific absolute quotas on two aluminum product categories.

Steel quotas under Section 232- South Korea, Brazil and Argentina

These quotas are administered by the United States to give exporters the least possible flexibility and demonstrate how complicated quota regimes can be. Some of the quotas are absolute – once the quota is reached, no additional amount can enter the United States for any price, unless an exclusion is granted. Some quotas apply to the full calendar year (but in practice may fill the minute the quota takes effect), and others are subject to quarterly limitations. Once a quota is filled in a given quarter, importers must wait until the next quarter until they can bring the product into the United States.

The True Cost in Practice

For South Korea, Brazil, and Argentina, quotas have reduced export volumes and revenue. According to U.S. Department of Commerce data, the overall quantity of steel South Korea, Brazil, and Argentina exported to the United States in 2018 dropped significantly compared to 2017, by 26.2 percent, 14.6 percent, and 20.1 percent, respectively.

In terms of value, South Korea and Argentina’s steel exports subject to quotas dropped by $430 million and $1 million, respectively, from 2017 to 2018, while the value of Brazil’s steel exports under the quota increased by nearly $145 million in 2018. Argentina’s aluminum exports subject to the quota dropped by approximately 86.8 million kilograms from 2017 to 2018, by 32.8 percent, with a decrease in value of approximately $101 million, according to data from the U.S. International Trade Commission.

Although South Korea, Brazil, and Argentina have benefitted from generally higher prices in the United States for steel and aluminum, so far, the quotas are effectively reducing U.S. imports from these countries.

US imports of steel mill products- South Korea, Brazil and Argentina

Upsides for U.S. Steel Producers

For U.S. steel and primary aluminum producers, Section 232 tariffs, and to a limited extent, quotas, are accomplishing their goal of bolstering U.S. manufacturing capacity and allowing their firms to become profitable again — at least in the short run.

Though some proponents of the Section 232 protections do not advocate for quotas specifically, and recognize their downsides, others argue that quotas are a necessary component of the Section 232 program. Here’s why.

First, for industries seeking protection, quotas arguably provide greater certainty than tariffs that imports will be limited. Under tariffs, if importers can bear the costs, or exporters can reduce their prices, imports will continue to flow in and competition will remain high. For example, Vietnam’s 2018 exports of flat steel products, which are covered by Section 232 tariffs, increased by 79 percent compared to 2017. If strict quotas were applied instead of tariffs, Vietnam’s 2018 exports likely would have decreased.

Second, steel and aluminum manufacturers argue that without quotas, “countries that have exemptions [to the Section 232 tariffs] would likely redirect their metals exports to the United States to take advantage of higher prices there, undermining the purpose of the tariffs.”

Finally, the Trump Administration perceives that Section 232 quota agreements with U.S. trading partners and security allies, in combination with tariffs, are helping to pressure and incentivize allies to take seriously the problem of global excess capacity. U.S. unilateral tariffs may also have the opposite effect, though, – making allies less willing to work cooperatively with the United States to address fundamental global problems.

Downsides for Downstream Industries

It’s a different story for U.S. downstream manufacturers, who say quotas have entailed “severe supply constraints” and “created even more business uncertainty than tariffs”.

Importers may no longer be able to guarantee that their goods can enter under the quota, or at all. They may encounter unanticipated costs in the form of storage charges and shipping fees if the quota is filled while goods are in transit. They may face unpredictably higher prices for goods subject to a quota. They may have to find new suppliers and bear all the costs of negotiating new contracts, building new relationships, and shipping from a new location. The exclusion process implemented in August 2018 may provide some relief for importers under supply pressure, though its application may also introduce more uncertainty.

More generally, downstream manufacturers argue that Section 232 quotas and tariffs raise prices inhibiting their competitiveness, and have a chilling effect on growth, employment and investment. Although many businesses have been buoyed by the strong U.S. economy, they say that employment and sales in their industries would have increased even more were it not for tariffs and quotas raising prices. Moreover, downstream industries using steel and aluminum products employ more Americans than steel and primary aluminum manufacturers, so many jobs are vulnerable if supply contracts too much.

North America Alternative to Metal Quotas

In order to move forward with passage of the United States-Mexico-Canada Agreement (USMCA), the United States, Canada and Mexico first had to address the steel, aluminum and retaliatory tariffs in place since 2018. Although all parties considered quotas as a possible way forward, in the end, they agreed to lift all steel, aluminum, and related retaliatory tariffs, as well as withdraw pending WTO litigation, without imposing quotas.

The three countries agreed to prevent the importation of aluminum and steel that is unfairly subsidized and/or sold at dumped prices; prevent the transshipment of aluminum and steel made outside of Canada, Mexico, or the United States to the other country; and establish a monitoring process to detect surges of aluminum and steel imports among them.

This agreement is a positive development for two key reasons: the parties removed tariffs while avoiding quotas, and agreed to address the underlying cause of U.S. industry distress – global excess capacity.

Addressing Global Excess Capacity is Key

Though tariffs and quotas may provide short-term relief, solving underlying global excess capacity problems is critical to addressing U.S. industries’ long-term challenges, and any long-term solution will require more than the mere application of protectionist measures. The United States will have to work closely and creatively with its trading partners to address this challenge directly and to persuade the world’s largest producers — including China — to reduce global excess capacity.


This article is a shortened version of an original report published by the Hinrich Foundation.

Feature Image Credit: Jason Welker, from “Protectionist Quotas” video on Youtube.

Holly Smith

Holly Smith is a lawyer and consultant based in Hong Kong. From 2009 to 2015, she served in the Office of the United States Trade Representative as a Director for Intellectual Property and Innovation, a Director for China Affairs, and a senior policy advisor to the Deputy U.S. Trade Representative.

This article originally appeared on Republished with permission.