Worldwide Aluminum Shortages are the Next Challenge to Trailer Industry
February 21, 2022
As with most things over the past couple of years, thetrailer industry continues to face changes and challenges. Last year, we highlighted some of the reasons for low stock, long lead times, and high prices,and now that more changes are coming it's time to provide an update.
First, the good news.
Although lead times remain longer and prices remain higherthan pre-Covid, we do have plenty of inventory in-stock. A year ago at thistime, our lot was as empty as it has ever been. Our manufacturers were havingtrouble keeping up with demand and trailers were trickling in. But that’s not aproblem now.
Today, we have a full lot of trailers in various types,sizes, colors, and materials. If you’re looking to purchase a trailer, now is agreat time to shop. We have a variety of utility trailers, cargo trailers, dumptrailers, concession trailers, car haulers, toy haulers, marketing trailers, officetrailers, and landscape trailers to choose from.
However, more changes are coming.
Trailers are made of either aluminum or steel. Steel trailers are typically less expensive, but also heavier and susceptible to rust. Aluminum trailers cost more because they are lighter, stronger pound-for-pound, and rust-resistant. However, there isan impending aluminum shortage that will make aluminum trailers virtuallynonexistent once current stock is depleted.
According to Market Realist, China is the world’s biggestaluminum producer, but the country’s decarbonization policies have tightenedrestrictions in order to reach carbon-emission goals.
In addition to reducing their aluminum output, China hasalso greatly increased its aluminum importing from other countries – a double-whammyfor the rest of the world’s aluminum supply.
Beyond China, many of Europe’s aluminum producers haveeither shut down or reduced capacity due to soaring energy costs.
- France’s Aluminium Dunkerque Industries recentlyannounced that it will lower its production.
- Spain’s Aloca completely closed its primaryaluminum smelter – the second largest in Europe – through 2023.
- Romania’s Alro smelter cut production by 60percent.
- Slovakia’s Slovalco smelter also reduced by 60percent.
Then there are the current tensions between Russia and Ukraine.Russia trails only China in worldwide aluminum production, and US or Europeansanctions over their aggression could further impact output. The Untied States already imposed sanctions in 2018 on Russia’s Rusal, which accounts for 6 percent of global aluminum supplies. Those sanctions were lifted in early 2019, but resulted in a leap in aluminum prices.
India, another one of the world’s leading aluminum producers,is also facing shortages due to coal supplies limited to just 40-50 percent ofrequired amounts.
According to Macquarie, a global financial services group based in Australia, “The aluminum market [will] see a deficit of 1.8 million tonnes this year after a shortfall of 1.5 million tonnes in 2021.”
All told, aluminum stocks are at a 22-year low, but aluminum demand worldwide has been steadily increasing overthe past decade or more. In the United States, especially during the pandemic, breweries are replacing glass bottles with aluminum cans and hard seltzerdrinks have surged in popularity.
Then, there’s the Canadian trucker protest, which has also wreaked havoc on the supply chain. While China leads the world in aluminum production, the U.S. imports the majority of its aluminum — 36.4 percent — from Canada. The auto industry, which has started increasing its use of aluminum over the last decade, was forced to slow production at Ford, General Motors, Honda, and Toyota plants in Michigan because of the lack of materials coming across the border.
That’s where much of the aluminum used in the trailer industry comes from, and once current supplies are used up they will be forced to build only steel trailers until they can get more aluminum.
One of our manufacturers sent out a bulletin last week saying, “Due to our aluminum tube supply being held up at the Canadian border, at this time we cannot build any stock aluminum trailers other than 5 and 6 wides. We do not have a time frame as to how long this will last. We will do our best to continue the sold aluminum trailers first until we run out of tube.”
Another one of our manufacturers told us today that they have six sheets of aluminum left, so everything moving forward will have to be steel.
If you are in the market to purchase a trailer and you know you want aluminum, give us a call at 630-524-2029. We have quite a few aluminum cargo trailers and car haulers still on our lot. Check out our current inventory.
If you want to custom order an aluminum trailer, that may not be possible for a while for the reasons stated above. As of now, steel isn’t a problem, so if material isn’t a big concern to you, go with a steel trailer. We work with plenty of manufacturers that build great quality steel trailers.
If you absolutely want aluminum, give us a call and we’ll do our best to figure out which manufacturers have the capacity to still build them.
Regardless, we will continue to provide open and transparent updates and work hard to provide solutions for our customers.
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