American Aluminum: Policy and Market Implications

Discussion of the Aluminum Association and Wittsend Commodity Advisors White Paper (May 2025)

Executive Brief

The U.S. aluminum industry is at a crossroads. Once the global leader in primary production, America’s smelters have dwindled to a fraction of their former capacity. In 1980, thirty-three smelters produced more than 4.6 million metric tons of primary aluminum annually. Today, only a handful remain, producing less than 700,000 metric tons. The reason is clear: America lost its competitive edge on power.

Electricity deregulation, coupled with the explosive rise of foreign production in Russia and China, gutted U.S. smelting. Data centers and artificial intelligence facilities now compete for the same firm electricity contracts once reserved for heavy industry, willing to pay more than $100 per megawatt-hour. Smelters, by contrast, require long-term contracts at or below $40/MWh to survive. The math simply doesn’t work.

Yet while primary smelting struggles, the industry itself is thriving. Demand for aluminum is surging, driven by lightweighting in vehicles, defense and aerospace applications, packaging, power infrastructure, and renewable energy. Aluminum has never been more important for national security and supply-chain resilience. The challenge is how to secure enough domestic aluminum without pricing ourselves out of the market.

Key Findings

Demand is strong and growing. U.S. aluminum demand is increasing at a 2.5% annual rate, reaching nearly 12 million metric tons in 2024. Every new truck, plane, and power line requires more aluminum than the generation before. By 2030, the average light vehicle will contain over 550 pounds of aluminum — nearly five times the content of 1980. The growth trajectory is undeniable.

Recycling is the engine. Over 80% of America’s aluminum feedstock now comes from secondary production. That is not a weakness, but a strength. Recycled aluminum requires just 5% of the energy of primary smelting. Every can captured is a miniature act of energy security: less grid demand, lower emissions, and more domestic supply. Over $10 billion has poured into U.S. recycling infrastructure since 2016, and secondary capacity could double by 2030.

The UBC gap is America’s Achilles’ heel with aluminum. Despite aluminum cans being infinitely recyclable and the most valuable material in the recycling bin, the U.S. recycles only 43% of used beverage containers. Nearly 800,000 metric tons — enough to equal the output of two modern smelters — are buried in landfills each year. No serious strategy for aluminum independence can succeed without addressing this failure.

Scrap is leaking overseas. The U.S. exported over 2.4 million metric tons of aluminum scrap in 2024, a 17% jump in just one year. Much of it went to Asia, where non-market competitors are ramping up secondary capacity three times larger than our own. Every ton of scrap we lose abroad is a ton that could have powered American manufacturing.

Policy Implications

The Aluminum Association’s report does not mince words: America needs a parallel-track strategy. Building new smelters will require billions of dollars, long-term power contracts, and political will. Restarting idle smelters will demand affordable electricity, skilled labor, and secure inputs like alumina and carbon. These paths are important but slow.

By contrast, secondary expansion is immediate, capital-efficient, and grid-friendly. A state-of-the-art recycling facility can be built in 18 months for less than a quarter of the cost of a new smelter. The limiting factor isn’t technology — it’s scrap supply.

That means policymakers should:

• Expand deposit-refund systems in high-population states to capture lost UBCs.

• Create incentives for curbside systems to keep participating while still claiming deposits on collected cans.

• Restrict scrap exports to non-market economies, keeping feedstock at home.

Why This Matters for Texas

Texas’ proposed recycling refund program is not just a litter bill, it is an exercise in supply-chain resilience. By providing a financial incentive to return beverage containers, Texas would help unlock the 800,000 tons of aluminum buried in landfills each year. That is the equivalent of building two new smelters, but without needing $6 billion in capital or decades of subsidized electricity.

The program also keeps scrap in-state, feeding Gulf Coast mills and creating Texas jobs. It does so in a way that is grid-friendly, because secondary aluminum uses only 5% of the energy of primary smelting. In an era when data centers are crowding manufacturers out of power markets, that is not just efficient, it is essential.

Most importantly, Texas can lead where Washington dithers. Deposit-refund systems have already proven their worth in Oregon and abroad, driving recycling rates to over 85%.

Conclusion

Aluminum is one of only eleven elements on the U.S. government’s critical minerals lists. It is not just about soda cans and car doors — it is about national security, economic competitiveness, and energy resilience. The new Aluminum Association report makes it clear: without action, America risks deepening dependence on foreign supply chains.

But the path forward is also clear: invest in capturing the cans we have and recycling.

Every can matters. Every ton matters. The question is whether America will seize the opportunity before it is gone.