Lochaber smelter's first US exports after tariff changes
The owners of the UK's sole aluminium smelter have initiated exports to the United States for the first time after recent tariff modifications created new market opportunities.
Alvance British Aluminium reported a production increase of approximately 10% at its Fort William plant in recent months to satisfy rising demand.
In the previous year, President Donald Trump implemented a 50% global tariff on steel and aluminium imports, with the UK uniquely granted a preferential reduced rate of 25%.
Currently, around half of the aluminium produced at the smelter is exported to the US.
Trump's tariff policy aimed to boost domestic production of steel and aluminium; however, the US remains reliant on foreign metals for industries such as automotive and aerospace.
Aluminium production is energy-intensive, and numerous smelters have closed over the past five decades in both the US and UK, often due to high electricity costs.
The Fort William facility, owned by the GFG Alliance since 2016, has remained operational owing to a significant advantage: its own supply of low-cost electricity from a major hydroelectric scheme.
Additionally, the plant supplies power from this scheme to the national grid.
Wheels factory
The site has an annual smelting capacity of 48,000 tonnes, equivalent to producing roughly three billion soft drink cans each year.
It employs just over 200 workers.
The recent entry into the US market and the 10% production increase have been welcomed developments for the plant following earlier setbacks related to expansion plans.
In 2020, the GFG Alliance abandoned proposals for an alloy car wheels factory due to a "significant decline" in car manufacturing.
Plans for a smaller-scale aluminium recycling plant have also been postponed.
US tariffs are not the sole factor influencing global aluminium trade.
Members of the Gulf Cooperation Council (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and UAE) produce over six million tonnes of aluminium annually.
Their access to low-cost energy from oil and gas has enabled them to capture approximately 8% of the global market, according to the International Aluminium Institute.
However, the ongoing US-Israel conflict with Iran and attacks on shipping in the Strait of Hormuz have severely disrupted supply chains and impacted prices.
'Stronger prices'
"We've increased production by around 10% in recent months in response to changing global trade flows following US tariffs, allowing us to enter the US markets for the first time as well as supplying existing and new customers in the UK and Europe," said Tom Uppington, managing director of Alvance British Aluminium.
"While the conflict in the Middle East has pushed aluminium prices higher, it has also contributed to rising energy costs.
Because aluminium production is very energy intensive, higher UK electricity prices currently offset the benefit of stronger metal prices, meaning we continue to cap production broadly in line with our self-generated power."
UK Minister for Trade Chris Bryant described it as "fantastic" that Alvance British Aluminium had fully leveraged "trade wins" secured by the UK government.
He noted that the UK was the only country worldwide to secure a 25% tariff on steel and aluminium imports.
