Bidenflation: The Price of Aluminum Foil is About to Skyrocket.
Well, it looks like the current Biden policy induced inflation is going to result in aluminum price increases or even a substantial aluminum price surge.
Several news sources indicated that large scale layoffs and the idling of several US aluminum processing plants was occurring due to the substantial increase of energy costs. Newsweek reported that in August 2022, Century Aluminum Company laid off 628 Smelter employees from the Hawesville, Kentucky plant. Century Aluminum stated that this was due to operational costs spiking more than 300%. Century Aluminum noted that the layoffs would last nine to twelve months. The Hawesville plant is the largest aluminum processing facility in the country. As of this publication, the laid off personnel have not been reinstated.
The closures are affecting other US processing plants as well. Alcoa Corporation, another of the world’s largest aluminum processors, curtailed one of its three operating smelting lines at the Warrick, Indiana operations facility in July 2022. Previously, at the end of 2021, Alcoa announced that it would permanently decommission their Wenatchee, Washington plant that had been idle since 2015.
Both companies saw their stocks plummet in 2022. In March 2022, Century Aluminum (CENX) closed at $29.49 per share. A year later, on March 17, 2023, CENX closed at $8.66 per share. Similar dramatic losses have been experienced by Alcoa. On March 24, 2022, Alcoa Corporation (AA) closed at $95.06 per share. On March 17, 2023, the stock closed at $39.15 per share.
So, what is the Biden regime doing to address this situation? Blaming Russia.
On October 12, 2022, Reuters reported that the administration is “considering” the restriction of importing Russian Aluminum. This is clearly a red herring because according to US trade data, of the nearly 514K tons of Aluminum imported yearly into the United States, only 19K tons (less than 4%) comes from Russia. This bogus argument is a distraction from the huge energy cost increases directly associated with the main problem – the Biden administration’s war on US energy independence.
Even more disturbing is that the raw material used in American aluminum production, bauxite, is minimally mined in the United States. It would be ridiculous and laughable to suggest that any domestic production of bauxite would increase under the Biden administration. Due to the emerging energy crisis in Europe, and the choking of domestic US energy production by Biden’s executive orders, it would be logical to assume that the prices, layoffs and material limitations of aluminum will result in aluminum price increases. This will also drive the costs of products made from aluminum up as well.
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