When a 127-Year-Old US Industry Collapses Under China’s Weight

Companies and consumers alike seek supplies with lowest prices. That trend is prompting Alcoa to cut back on making and refining aluminum. “For more than a decade, output has been moving to where it’s cheaper to produce: Russia, the Middle East and China,” reports Joe Dean for Bloomberg News, adding that low labor, energy and currency costs give overseas plants an advantage. China accounts for more than half of global aluminum production this year, up from 24 percent in 2005. “A global glut has driven prices down by 27 percent in the past year, rendering American operations unprofitable and accelerating the pace of the industry’s demise.” Harbor Intelligence suggests that Alcoa’s decision accounts for about a third of the US total for primary aluminum but less than 1 percent of the global total. If prices do not rise, one analyst predicts that almost all US smelting plants could close next year. Alcoa has operations in 30 nations. – YaleGlobal