North American Supply Expansion: EGA Smelter and Tariff Impact
Key Questions
What is EGA's planned contribution to North American aluminium supply?
EGA's $4B US smelter with 750kt capacity aims to double domestic supply, representing a major structural shift. However, it depends on securing long-term power contracts amid competition from data centers.
What challenges could delay new North American smelter projects?
Power availability is the key bottleneck, with additional regulatory friction from local disputes such as Oklahoma's AG seeking to block the Inola smelter. New capacity overall is not expected until the late 2020s.
How does Rio Tinto's expansion support the North American market?
Rio Tinto's Quebec AP60 project (160kt low-carbon capacity) began commissioning in May 2026, adding supply by end-2026 with emissions at just 1.6 tCO2e/t. Combined with other projects, it helps address tariff-driven import reductions and rising demand.
EGA's $4B US smelter (750kt) doubles domestic capacity, a transformative structural shift. Power is the real bottleneck: new capacity hinges on long-term electricity deals, with data centers outbidding smelters. EGA-Century JV in Oklahoma contingent on power contracts; local political dispute (Oklahoma AG seeking court block on Inola smelter) adds regulatory friction. Rio Tinto's Quebec expansion (AP60, 160kt low-carbon) began commissioning in May 2026, adding to North American supply by end-2026; emissions at 1.6 tCO2e/t. Combined with Century, it addresses tariff-driven import dependence. US tariffs cut imports (Canada -25% YoY), total US supply at lowest since 2018, while demand set to rise 40% over next decade. New capacity won't arrive until late 2020s. Recycling expansions (600kt+ by 2030) and demand from solar/AI add to narrative. April 2026 Section 232 proclamation adds complexity. New tariff threat from Trump over forced labour adds uncertainty. North American automotive aluminum demand remains stable, with BEV-driven growth flattening and aluminum use becoming more selective—tempering broad bullishness.