U.S. Faces Possible Aluminum Shortage Due to Tariffs and Sanctions
The Aluminum Extruders Council (AEC) is calling on Washington, D.C., to exclude from tariffs all countries from which the domestic extrusion industry can import primary aluminum until the administration can guarantee a sufficient domestic supply. It also released a statement in opposition to primary aluminum import quotas.
The AEC cites a disruption to the primary aluminum supply chain due to the 10 percent tariff on imported aluminum from non-excluded countries, and sanctions placed upon Russian oligarchy at the beginning of April, which includes United Company Rusal Plc., one of the world’s largest aluminum companies.
However, the U.S. government ex-tended the time U.S. customers of Rusal have to comply with the sanctions from June 5 to October 23.
Brook Hamilton, president of Bonnell Aluminum, told USGlass magazine that he received panicked calls after the initial announcement regarding the sanctions.
“People who rely on Rusal called asking if we could commit to shipping X number of trucks of billet, or logs, in July and August when supply runs out. We need price or scrap to produce logs. Only 3 percent of our supply comes from Rusal so we could shore up the gap with other vendors, but I can’t guarantee that everyone will have metal,” he says. “I’ve read that there could be a 10- to 18-percent supply hole. The high end is a large number.”
Hamilton says that U.S. suppliers expected to ramp up capacity can’t do that without alumina, the ore that is used to create aluminum. Rusal owns the closest supplies of alumina in Ire-land and Jamaica. He says the future is uncertain and that he can’t predict whether the U.S. will “let Russia off the hook” or allow another extension once October gets closer.
An AEC release reads, “It is important that policymakers in our country’s Capitol find a solution to this self-inflicted wound. No one in the U.S. aluminum extrusion industry has sympathy for the Russian oligarchy, and it’s simply not an issue they have standing to address.
However, there must be a way to address that concern without destabilizing the domestic industry.”
According to Hamilton, the tariffs have not had a major impact on the physical supply of aluminum in the U.S. due to exclusions made after the tariffs were originally accounted and stockpiles available to the U.S.
Jeff Henderson, AEC president tells USGlass magazine: “I do think it’s fair to say that at a minimum, the sudden increase in aluminum prices and premiums are certainly negatively impacting extrusion buyers, and the curtainwall folks are no exception.”
The AEC released a statement supporting the Aluminum Association’s position that the current administration must not impose quotas on imported primary aluminum products.
The AEC says that, considering the disruption of the supply chain because of recent Russian sanctions, any additional restraint of imported aluminum into the U.S. aluminum supply chain will lead to work stoppages at extrusion plants. As a result, extrusion buyers will be forced to source parts from foreign suppliers, namely China, as an alternative source to maintain production.
AEC leadership believes that China is a threat to the domestic industry, which it made clear during the 232 investigation.
The AEC is calling on the administration to empower the domestic aluminum industry by ensuring its access to the raw materials it needs to support a vibrant and growing supply chain in the manufacturing base.
ABC Baltimore Recognizes Kensington Glass Arts
ABC Baltimore, a local chapter of the Associated Builders and Contractors, gave its Excellence in Construction Award to Kensington Glass Arts Inc. (KGa). The award recognizes exceptional project collaboration and craftsmanship completed by the association’s members each year. KGa was recognized for their work in the glass and glazing category.
In 2017 KGa-Baltimore completed a project with general contractor Southway Builders for the renovation of a not-for-profit foundation in Baltimore. The completion of the project was a carefully choreographed dance between all the trades due to a tight schedule and numerous high-end custom features with long lead times. KGa-Baltimore’s scope of work included five floors of interior glazing and storefront as well as specialty accent glass around the reception and elevator lobbies.
American Architectural Manufacturers Association Navigates Recent Steel and Aluminum Tariffs
Since steel and aluminum tariffs were issued against China in March, many uncertainties have clouded the glass and glazing industry’s discussions of the future. The American Architectural Manufacturers Association (AAMA) held a webinar led by Michael Collins, managing director of Building Industry Advisors LLC, to address some of the questions companies have about the impact of these tariffs.
In “Navigating Trade Tariffs” Collins explained how tariffs work, the scope and timing of the recent tariffs and their potential economic impact.
DO TARIFFS WORK?
Tariffs are intended to make products produced overseas more expensive than domestic products if unfair trade practices, such as abusive intellectual property practices, are happening or if products are sold at an unfair level, according to Collins.
However, Chinese companies would not be paying the tariffs; domestic companies importing Chinese steel or aluminum would be responsible for paying the tariff.
“Those sort of practices can hallow out the domestic industry. Prices can be raised higher after domestic sup-pliers go out of business,” he said.
“Frankly, [tariffs] don’t end up working in most cases because they’re not imposed in a vacuum. If you impose a tariff on a country’s goods they can simply pose a retaliatory tariff.”
Collins looked to a past example to show how tariffs can backfire on a country’s economy.
“The U.S. economy was lagging in 1930. There was an idea that foreign competitors were hurting the U.S. and tariffs were passed,” he said. “There were retaliatory tariffs on U.S. exports which hurt our economy, and deepened, worsened and lengthened the Great Depression.”
TIMING AND SCOPE
“Tariffs are a changing landscape —the best thing to do to protect your company is to pay attention to all of this global news. Every once in a while, Google ‘aluminum and steel tariff latest articles.’ They’re changing on a weekly basis,” said Collins.
China, along with many other nations, currently faces a 25 percent tariff on imported steel and 10 percent tariff on imported aluminum.
“The problem is that immediately you have companies like steel wheel manufacturers saying that no domestic producer can make the specific wheels they need and they could go out of business. That leads to exemptions and several thousand companies that want exemptions. They have to be evaluated on a company-by-company basis which involves a lot of bureaucracy,” said Collins.
Collins advised companies to work with a supplier that can source steel and aluminum from nations not included under the tariffs.
“It would behoove you to be notified when the exemption status of your country supplier changes. If you bring in these products from suppliers who source from non-exempt countries then you need an alternate,” he said. “Those quotas I mentioned may be spoken for and you may be left out in the market buying tariff-laden steel and aluminum.”
He urged companies to be careful when quoting prices to customers during this uncertain time.
“Don’t guarantee a price on a quote that is two months out if you only have a one-month price guarantee from your supplier. I can’t stress enough how important it is to revisit contracts with customers rather than just confirming that a price is still the same,” he said.
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