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Aluminum Association Calls for Targeted, Multilateral Approach to Address Aluminum Subsidies and Overcapacity

January 14, 2021

Tom Dobbins, president & CEO of the Aluminum Association, released the following statement on potential changes to the Section 232 aluminum tariff program under the incoming Biden administration:

“The Aluminum Association continues to favor a targeted approach to trade enforcement. Across-the-board tariffs have failed to dent the non-market-based structural subsidies that drive overcapacity and hurt U.S. aluminum producers and workers. We look forward to working with President-elect Biden’s trade team on new, creative approaches to combat this perennial challenge, including renewed cooperation with traditional trading partners and allies.

As the administration considers changes to the Section 232 tariff program, the association will provide country-specific input. Changes to the program should be considered carefully to allow the market to adjust as a comprehensive trade policy is implemented to support the U.S. aluminum value chain. As long as Section 232 tariffs remain in place, we will continue to call for significant reforms to the product exclusion process, which has allowed importers to game the system and created incentives to import aluminum products. Ultimately, we favor a multilateral approach to encourage market-based economies to keep unfairly traded aluminum out and minimize market distortions.“

Learn more about the latest developments on Section 232 Tariff - Product Exemptions & Exclusions

Aluminum Highlights

Week Ending: January 15, 2021An update on industry activity and economic indicators

This report is based on information reported to the Association by participants, which is aggregated by the Association. While the Association believes that its statistical procedures and methods are reliable, it does not warrant the accuracy or completeness of the data. All data contained herein are subject to revision. For further information, contact Ryan Olsen, V.P. Business Information and Statistics at 1-703-358-2984 or email rolsen@aluminum.org. © The Aluminum Association, Inc. All rights reserved.

The Aluminum Association

2Industry Activity

January 15, 2021

70

80

90

100

110

120

130

Mill Products Order Receipts(Index 2013=100)

NNO Index 3 Mo. Moving Avg.

The Aluminum Association Not Seasonally Adjusted

January 12 – The Association’s “Index of Net New Orders of Aluminum Mill Products” for December 2020 increased 5.1 percent over November 2020. Orders for flat roll products (sheet, plate, can stock and foil) rose 6.6 percent over the previous month, while orders for extruded products were up 2.6 percent and orders for redraw rod decreased 12.5 percent. Compared to December 2019, total orders increased 11.0 percent. On average, orders recorded by domestic producers during 2020 were down 5.8 percent from total year 2019.

January 12 – Shipments of can stock by domestic producers totaled 327.6 million pounds during December 2020, an increase of 10.7 percent over the December 2019 total of 295.8 million pounds. Compared to the previous month, shipments rose 4.2 percent over the November 2020 total of 314.5 million pounds. Preliminary shipments for 2020 totaled 3,820.4 million pounds, up 3.3 percent over the 2019 year-to-date total of 3,697.6 million pounds.

Compared to December 2019, producer shipments of can stock to U.S. markets rose 9.6 percent to 300.6 million pounds, while exports increased 25.3 percent to 27.0 million pounds.

200

250

300

350

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Can Stock Shipments2019 2020*

The Aluminum Association Not Seasonally Adjusted

Millions of Pounds

January 13 – Estimated net shipments of Aluminum Sheet and Plate by U.S. and Canadian producers totaled 704.1 million pounds during December 2020, an increase of 7.8 percent over the December 2019 total of 653.1 million pounds. Compared to the previous month, net shipments rose 1.9 percent over the November 2020 revised total of 691.0 million pounds. Preliminary shipments for 2020 totaled 8,198.5 million pounds, down 5.7 percent from the 2019 total of 8,695.7 million pounds.

Shipments of Can Stock totaled 327.6 million pounds during December 2020, up 10.7 percent over the December 2019 total of 288.0 million pounds, while shipments of Non-heat Treatable Sheet (excluding Can Stock) increased 28.2 percent to 233.9 million pounds and shipments of All Other Sheet and Plate decreased 18.5 percent to 142.5 million pounds.

400

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800

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Producer Net Shipments of Aluminum Sheet and Plate2019 2020*

The Aluminum Association Not Seasonally Adjusted

Millions of Pounds

The Aluminum Association

3Industry Activity Continued…

January 15, 2021

January 13 – Shipments of Aluminum Foil by U.S. and Canadian producers totaled 65.0 million pounds during December 2020, an increase of 19.2 percent over the December 2019 total of 54.5 million pounds. Compared to the previous month, shipments decreased 8.6 percent from the November 2020 revised total of 71.1 million pounds. Preliminary shipments for 2020 totaled 868.9 million pounds, off 2.8 percent from the 2019 total of 893.7 million pounds.20

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90

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Foil Shipments2019 2020*

The Aluminum AssociationThe Aluminum Association Not Seasonally Adjusted

Millions of Pounds

January 14 – Shipments of Aluminum Powder and Paste to domestic markets by domestic producers, including imports by domestic producers, totaled 5.75 million pounds during December 2020, up 13.0 percent over the December 2019 total of 5.08 million pounds. Compared to the previous month, shipments increased 38.2 percent over the November 2020 total of 4.16 million pounds. Preliminary shipments for 2020 totaled 65.32 million pounds, down 8.7 percent from the 2019 total of 71.54 million pounds.

Compared to December 2019, shipments of powder to domestic markets rose 11.0 percent to 5.23 million pounds, while shipments of pasteincreased 39.3 percent to 0.51 million pounds.

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6

8

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Domestic Shipments of Powder and Paste2019 2020*

The Aluminum Association, Inc. Not Seasonally AdjustedThe Aluminum Association, Inc. Not Seasonally Adjusted

Millions of Pounds

The Aluminum Association

4Economic Activity

January 15, 2021

January 12 – According to the most recent DAT Trendlines release (January 4 – January 10), the spot market returned to regular business following the holidays. Capacity returned at a quick pace, lowering load-to-truck ratios (-6.7% week-over-week van; -4.7% week-over-week flatbed). As a result, rates fell on most lanes, while national averages remain above the December averages ($2.46/van and $2.47/flatbed).

January 13 – The U.S. Consumer Price Index for All Urban Consumers (CPI-U) increased four-tenths of one percent in December on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported. This followed an increase of two-tenths of one percent the previous month. The core consumer price index (all items less food and energy) increased one-tenth of one percent after rising two-tenths of one percent the previous month. Over the last 12 months, the all items index has advanced 1.3 percent, while the core price index has increased 1.6 percent over the same period.

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-0.8

-0.6

-0.4

-0.2

0.0

0.2

0.4

0.6

0.8

1-m

onth

Perc

ent C

hange

U.S. Consumer Price IndexAll Urban Consumers (CPI-U)

All items All items less food and energy

Bureau of Labor Statistics Seasonally Adjusted

January 12 – According to the U.S. Bureau of Labor Statistics, the number of job openings was little changed at 6.5 million (-105,000), while the job openings rate was unchanged at 4.4 percent, on the last business day of November. Separations in the manufacturing sector decreased 2.9 percent from October, but were 6.9 percent above the level a year ago. Manufacturing openings fell by 6.2 percent from the previous month, but were 24.2 percent above the November 2019 level. The spread between hires and separations in manufacturing remained in positive territory (+57k), as November hires were an estimated 397 thousand (+5.6% m/m), while separations totaled 340 thousand.

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900

SOURCE: U.S. BUREAU OF LABOR STATISTICS/FRED

U.S. Manufacturing Job Openings and Labor Turnover (Thousands)

Openings Hires Seperations

The Aluminum Association

5Economic Activity Continued…

January 15, 2021

January 15 – The Producer Price Index for final demand (which includes goods and services) rose three-tenths of one percent in December, seasonally adjusted, the U.S. Bureau of Labor Statistics reported. Final demand prices increased one-tenth of one percent in November, and rose three-tenths of one percent in October. The index for final demand goods increased 1.1 percent, while final demand goods less food and energy advanced five-tenths of one percent m/m. On an unadjusted basis, the final demand index increased eight-tenths of one percent for the 12 months ended in December.

0.3%

1.1%

0.5%

-3.0%

-2.0%

-1.0%

0.0%

1.0%

2.0%Monthly Change in Selected PPI Indexes

Final Demand

Final Demand Goods

Final Demand Goods (Less Food & Energy)

Bureau of Labor Statistics Seasonally Adjusted

January 15 – The Federal Reserve Board announced that U.S. industrial production rose 1.6 percent in December. Overall manufacturing output advanced 1.0 percent m/m, while the production of durable goods was also up 1.0 percent from the November level. Year-over-year, manufacturing output declined 2.6 percent. At 105.7 percent of its 2012 average, total industrial production in December was 3.6 percent lower than it was a year earlier and 3.3 percent below its pre-pandemic February reading. Capacity utilization for the industrial sector rose 1.1 percentage points in December to 74.5 percent, a rate that is 5.3 percentage points below its long-run (1972–2019) average.

105.7103.6

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112

U.S. Industrial Production Indexes2012 = 100

Total

Manufacturing

Federal Reserve Board Seasonally Adjusted

The Aluminum Association

6Energy

January 15, 2021

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80

Crude Oil Near-Month Futures (WTI & Brent)(U.S. dollars per barrel)

Brent

WTI

CME Group Inc.

January 15 – On the NYMEX, the near-month WTI crude oil futures (Cushing, OK WTI Future Contract 1) closed the week at $52.36/bbl on Friday, January 15, up $0.12 (+0.2%) from last Friday's close of $52.24/bbl. U.S. oil futures remained stagnant for the week, as investors weighed fresh COVID-19 outbreaks in China, which has been an engine of demand as other major economies were slowed by the coronavirus pandemic. Active U.S. oil-drilling rigs rose by 12 (287) this week, the sixteenth increase in the last seventeen weeks. From the level a year ago, rigs were off 386. Brent Crude on London's ICE Futures exchange decreased to $55.10/bbl (-1.6%). Friday's spread between the two was $2.74/bbl, down from last week's spread of $3.75/bbl.

January 14 – The U.S. Energy Information Administration (EIA) reported that natural gas spot prices rose at most locations this report week (Wednesday, January 6 to Wednesday, January 13). The Henry Hub spot price rose from $2.70 per million British thermal units (MMBtu) last Wednesday to $2.75/MMBtu.

At the New York Mercantile Exchange (Nymex), the price of the February 2021 contract increased 1¢, from $2.716/MMBtu last Wednesday to $2.727/MMBtu. The price of the 12-month strip averaging February 2021 through January 2022 futures contracts remained the same Wednesday to Wednesday at $2.841/MMBtu.

The Aluminum Association

7U.S. Dollar

January 15, 2021

January 8 – According to the most recent release by the Federal Reserve Board, the Trade Weighted U.S. Dollar Index closed at 111.63 on Friday, January 8, essentially unchanged from the previous Thursday's level of 111.65 (Federal Offices were closed Jan. 1). The Index remains well below it's 30-day moving average, having not been above in over two months. Over the last six months, the Index has declined 6.9 percent, while it has fallen 3.1 percent over the last 12 months.

The Trade Weighted U.S. Dollar Index is a weighted average of the foreign exchange values of the U.S. dollar against the currencies of a broad group of major U.S. trading partners.

6.48

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6.50

6.60

6.70

6.80

6.90

7.00

7.10

7.20Chinese Yuan to US Dollar

Chinese Yuan to One U.S. Dollar

30 Day Moving Avg.

Federal Reserve Board

1.271.25

1.30

1.35

1.40

1.45

1.50Canadian Dollar to US Dollar

Canadian Dollars to One U.S. Dollar

30 Day Moving Avg.

Federal Reserve Board

103.89

102.0

104.0

106.0

108.0

110.0

112.0

114.0Japanese Yen to US Dollar

Japanese Yen to One U.S. Dollar30 Day Moving Avg.

Federal Reserve Board

1.23

1.06

1.08

1.10

1.12

1.14

1.16

1.18

1.20

1.22

1.24US Dollar to Euro

U.S. Dollars to One Euro

30 Day Moving Avg.

Federal Reserve Board

111.63110.00

115.00

120.00

125.00

130.00

Trade Weighted U.S. Dollar Index: Broad, Goods and Services(2006 = 100)

Trade Weighted U.S. Dollar Index

30 Day Moving Avg.

Federal Reserve Board

The Aluminum Association

8The Aluminum Association, founded in 1933, works globally to aggressively promote aluminum as the most sustainable and recyclable automotive, packaging and construction material in today’s market. The Association represents North America and foreign-based primary producers of aluminum, aluminum recyclers, producers of semi-fabricated products and foundries as well as suppliers to the industry or distributors or jobbers.

The Aluminum Association's statistical programs provide industry information on primary aluminum production, new orders of mill products, industry shipments, end use market estimates, inventories, recycling and foreign trade on a monthly, quarterly and annual basis. Special surveys provide data on specific subjects such as primary capacity, flat roll capacity, inventories and castings shipments. Custom reports are available on a for-fee basis. Web briefings are also available upon request.

Industry OverviewAluminum Statistical Review (Annual Fact Book)Aluminum Highlights (Weekly)Aluminum Situation (Monthly)Summary of Producer Shipments and Inventories (Monthly)

Primary AluminumPrimary Aluminum Production – U.S. and Canada (Monthly)Primary Installed Capacity (Annual)Shipments of Primary Aluminum by Form (Quarterly)

Mill ProductsIndex of Net New Order Receipts for Aluminum Mill Products (Monthly)Can Stock Shipments (Monthly)Extruded Products Shipments and Press Utilization (Monthly)Flat Roll Capacity (Annual)Forging and Impacts Shipments (Monthly)Rod, Bar, and Wire Shipments (Monthly)Sheet and Plate Shipments (Monthly)

End UseExtrusion Shipments by End Use (Quarterly)Fin Stock Shipments by End Use (Quarterly)Foil Shipments by End Use (Monthly)Sheet and Plate Shipments by End Use (Quarterly)

CastingsU.S. Foundry Castings Shipments (Quarterly)Canada Foundry Castings Shipments (Annual)

RecyclingNew Can Stock (Class) Scrap Receipts (Monthly)Used Beverage Can Reclamation (Annual)

Foreign Trade (based on government customs data)Summary of North American (U.S. & Canada) Imports and Exports by Commodity (Monthly)U.S. Import Dashboard (Monthly)U.S. Aluminum Import Monitor - Section 232 (Monthly)Foreign Trade Online Database - U.S., Canada and Mexico Exports & Imports of Aluminum (By Commodity, by Country)

For a complete list of statistical publications and reports visit our bookstore.

January 15, 2021