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Aluminum industry clawing back after recession: Noranda's Smith

Keywords: Tags  Aluminum Association, Noranda Aluminum Holding, Layle Smith, Kip Smith, aluminum demand, aluminum consumption, automotive, transportation housing

ISLE OF PALMS, S.C. — The North American aluminum industry is seeing demand recover to pre-recession levels, according to Noranda Aluminum Holding Corp.’s top executive.

Both demand and consumption have jumped nearly 30 percent since hitting recession-era lows in 2009, Layle "Kip" Smith, president and chief executive officer of the Franklin, Tenn.-based aluminum producer, said April 10 during a roundtable at the Aluminum Association’s spring meeting in Isle of Palms.

"That demand trend continues," he added, noting that North American aluminum demand grew by some 5.3 percent in 2012 compared with 2011, while consumption grew about 6.6 percent in the same comparison.

"The first part of revenue growth starts with demand, and we’ve seen nice demand growth for the industry," Smith said.

Among the key drivers of that improved demand is the automotive sector, where aluminum has seen "uninterrupted growth" for the last four decades and aluminum consumption is expected to double by 2025, he said.

At the same time, demand from the transportation sector continues to grow, while the housing market is showing encouraging signs, Smith said. While the housing sector might be "a long way off" from the highs reached in the mid-2000s, current trends in new housing starts are encouraging, he added.

Increased demand for aluminum is having a positive impact on jobs and economic output in North America, according to Smith, who estimated that roughly one-third of all U.S. manufacturing depends on products made by the aluminum industry.

The aluminum industry has approximately 3,900 facilities in all 50 states, creates $30 billion in direct economic output and employs more than 106,000 people, he said, noting that once downstream and indirect operations are added to the equation those figures jump to $60 billion in economic output and an additional 360,000 jobs.

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