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Economic Issues & Market Analysis Brief: Aluminum

The U.S. aluminum industry accounts for 15% of the world's primary aluminum production. Although primary aluminum production has dropped since its peak in 1999, several key reasons exist for why its range of applications continues to expand: it is lightweight, has corrosion resistance, and is recyclable. For example, the automotive industry has increased the aluminum content in automobiles, replacing steel components (i.e. engine blocks, manifolds, body panels on some models, etc.) in order to reduce weight and increase mileage ratings.

Molten aluminum is either produced from bauxite ore (primary) or from aluminum scrap (secondary).

Due to high energy requirements, the major aluminum producers tend to locate in areas with low energy costs (i.e. electricity), including the Northwest and Ohio River Valley. Secondary producers tend to locate near industrial centers. Both primary and secondary aluminum producers refine and melt the aluminum and then either pour it into bars called ingots (for shipment to casting, molding or rolling facilities) or deliver it in molten form to die casters.