President and CEO of the Aluminium Association of Canada Jean Simard said the Canadian aluminium industry is looking at ways to ensure that the large scale export of aluminium to the U.S. is not affected by instability in the trade relationship with the U.S.
“With Trump in power, the aluminium industry is also up in the air,” said Simard, addressing Kitimat Chamber of Commerce members and business leaders recently.
Canada exports 75 per cent of its aluminium production to the U.S., which includes the 400,000 tons produced annually at the Rio Tinto plant in Kitimat. Canada is also the U.S.’ largest source of primary metal imports, representing over two thirds of the total metal entering the U.S.
“We are in close contact with the U.S. government to protect the corridor,” said Simard. “We are also strategically positioned for the future to carve out new markets for Canadian aluminium.”
He was referring to negotiations around the Canada/European Union Comprehensive Economic and Trade Agreement (CETA) which is aimed at strengthening economic relations and boosting Canada’s trade with the E.U., the world’s second-largest market, and eliminating or reducing trade barriers.
“Europe is the new China – we have to think out the box now. This is part of the change that is ahead of us,” said Simard. “Our stability is going to be ensured through change. It’s time we build a new agreement with Europe.”
He added that it’s a myth that the U.S. received major imports of Chinese-produced aluminium.
“The Asian market is now taken over progressively by Chinese exports and new Asia ex-China capacity,” said Simard. “Canada is the U.S.’ largest source of primary metal imports.”
He added that part of the change necessary would be to aim at niche products and Value Added Services, as well an increasing research into aluminium production.
“We need to research to look into further application of aluminium, like bridge-decking services,” said Simard.
He added that Canada was at the forefront of producing aluminium as cost-effectively and environmentally-friendly, compared to other countries.
“We have modernized our plants and improved operational efficiency. We cannot get our technological efficiency any lower,” said Simard.
He added that it would take up to 15 years before Canada would be able to monetize this advantage.