Aluminum industry is reborn and gives up import quota

The Brazilian industry of aluminum stopped asking for tax exemptions on imports of the light metal for the first time in almost a decade, while the country reduces dependence on foreign suppliers.

“We realized from studies of demand versus production that it would not be necessary (to ask for an import quota for 2023)”, said Janaina Donas, president of the Brazilian Aluminum Association (Abal), in an interview.

O Brazil is on track to become self-sufficient in aluminum, nine years after the energy crisis that sent electricity prices soaring and forced producers to close energy-intensive factories.

The biggest economy in Latin America became a net importer of aluminum and the local industry required a duty-free import quota system to deal with potential supply constraints.

The resumption of production at Alumar, Alcoa, and the additional capacity planned by Cia. Brasileira de Alumínio in 2023 will increase Brazil’s aluminum capacity by 49%, to around 1.4 million tons this year.

The changes, added to the high rate of scrap recycling, mean that Brazil will be able to produce enough aluminum to meet its domestic needs.

The Brazilian government allocated 350,000 tonnes for duty-free aluminum imports last year, but by November it had only brought in about half of that volume, according to Abal.

Progress occurs when energy restrictions in the Europe and on China led to the closure of smelters, reducing the global supply of metal.

“This makes Brazil less susceptible to volatility, such as that triggered by the pandemic or the war in Ukraine,” said Donas.

“We are restoring supply chain resilience.”

Brazil has already sought efforts to curb Chinese imports of the metal, with the government imposing countervailing measures on some rolled aluminum products (plates and sheets) starting in April, alleging that China is subsidizing exports.