US Al can sheet imports hit multiyear high

US imports of aluminum can sheet climbed to their highest level since at least 1998 in the second quarter as mill investments in Asia targeting North American consumers ramped up, demand for beverages was strong and recently announced domestic investments were still years away.

US imports of aluminum beverage can body sheet increased to 84,500 metric tonnes (t) in the second quarter from 57,600t a year earlier, according to Department of Commerce data. This was driven by greater shipments from Thailand and South Korea, homes to large rolling mills operated by UACJ and Novelis, respectively.

South Korea was the number one supplier of can body sheet to the US in the second quarter at 30,600t, more than triple year-earlier levels of 8,600t.

Thailand was the number two supplier, raising shipments by 48pc to 20,500t compared to a year earlier.

Novelis has invested heavily in South Korean operations since 2011, when it started a $400mn expansion program at its Yeongju and Ulsan plants and laid out plans for further expansion in February.

Japanese aluminum producer UACJ has been investing in its Thai rolling mill since at least 2016, aiming originally to have it ramped up by the end of the fiscal year 2020, but foundation construction issues delayed the project, causing some of gains to be realized more recently.

China was the number three supplier of can sheet to the US in the second quarter, with shipments up by 42pc from a year earlier at 13,600t.

While Chinese common alloy sheet, foil and finished extrusions are all covered by heavy antidumping duties, can sheet specifically is exempt.

The number four supplier was Japan, which shipped 10,200t to the US in the second quarter, up by 13pc from a year earlier.

Imports are likely to fall off sharply over the next several years as US domestic can sheet capacity is projected to grow significantly with investment in greenfield mills by Novelis, Ball and most recently a branch off into the wrought aluminum space by steelmaker SDI.

US fillers were largely self-sufficient on can sheet up until 2008, when imports began to pour in after registering zero for years. US mills' growing focus on shifting to higher value products such as automotive body sheet left the door open for international mills to grab market share for can sheet, seen then by domestic players as a mature, tapped out market fetching less appealing product premiums. But over the past two years, packaging firms like Ball, Crown and Canpack have invested in new US canning plants, reviving interest in can sheet and bringing with it fresh investment.

US industrial production by the soft drink and ice market was up by 6pc the second quarter compared with a year earlier, according to Federal Reserve Economic Database data, while US retail sales of beer, wine and liquor stores were up by 3pc in June compared with the same month in 2021 at $5.9bn.

By John Betz