The Magnitude 7 Metals aluminium plant close to the banks of the Mississippi is eerily quiet today, its electrolysis cells darkish and devoid of individuals, its as soon as white-hot smelters chilly to the contact.
“It breaks my heart, ‘cos I’ve seen it in all its glory,” mentioned Greg Lester, the power’s supervisor, gesturing upwards to its cavernous vaults.
The plant, a brief drive from New Madrid within the economically depressed Missouri Bootheel, symbolises the decline of US heavy trade. It’s a hunch that President Donald Trump is decided to arrest and reverse.
His instrument of alternative is tariffs. Final month, he introduced he was rising levies on aluminium from 10 per cent to 25 per cent, saying imports of the metallic have been threatening to impair US nationwide safety.
Trump’s financial nationalism has a transparent aim. By addressing commerce imbalances, he needs to resuscitate moribund home industries, reshore jobs and reduce American dependence on imports of important metals.
However it should take greater than that to revive the fortunes of Magnitude 7, or Mag7 as it’s recognized. The downturn within the US trade is being pushed above all by excessive vitality prices. They usually present no signal of abating.
“Unless I have power at a fair price I can’t restart the facility,” mentioned Lester.
Manufacturing at Mag7 was curtailed in January final yr, when the Mississippi River froze over, disrupting the provision of important uncooked supplies to the plant. However excessive vitality costs have been already taking their toll, making it ever tougher for the plant to show a revenue.
Within the months since its closure, Mag7’s homeowners have been looking for a method to carry it again on-line — with out success.
The dearth of inexpensive electrical energy has affected different producers, too. Century Aluminum introduced in 2022 it was idling its smelter in Hawesville, Kentucky, citing “skyrocketing” vitality prices. Alcoa closed down its Intalco smelter in Washington in 2023 for related causes.
“For aluminium, everything comes down to electricity,” mentioned Annie Sartor of Industrious Labs, a non-profit targeted on the decarbonisation of heavy trade. “There’s a phrase that aluminium is electricity in solid form.”
New Madrid isn’t any exception. “This smelter uses more electricity in 24 hours than the whole city of Springfield, Missouri,” mentioned Lester.
That’s the reason the current rise in energy costs has been so painful for producers. The typical price of electrical energy for US smelters is anticipated to rise to $36 per megawatt hour in 2025, up from $33/MWh in 2024, in response to CRU Group, a commodity information firm.
An trade veteran, Lester has had a ringside seat on the decline of American aluminium. When he began out, the US had 34 smelters — now it has 4. It produced 30 per cent of the world’s aluminium in 1980 — now it accounts for simply 1 per cent.
“China annihilated us,” mentioned one seasoned trade govt. “As one guy used to say to me, if you make something China needs, you’re going to be wealthy. If you makes something China makes, you’re fucked.”
New Madrid’s historical past displays the vicissitudes of the entire sector. It was in-built 1971 by Noranda Aluminum and employed 1,100 native individuals, turning into a linchpin of the native financial system.
“I could take you down every street in New Madrid and point to a house where an employee of Noranda worked,” mentioned Nick White, the city’s mayor.
However the firm went bankrupt in 2016 citing the declining value of aluminium, which fell 2.1 per cent on the London Steel Change between 2010 and 2023, in addition to excessive electrical energy costs and labour prices. “That sent shockwaves throughout the region,” mentioned White.
Within the ensuing months, dozens of households moved away seeking work. “Every other week you’d see a trailer loaded up with furniture driving off,” mentioned Charles White, a pensioner who labored on the smelter for 40 years.
A glimmer of hope got here in 2016 when a holding firm referred to as Otto von Blue, owned by three People led by former Glencore dealer Matt Lucke, purchased the plant out of chapter for $14mn in a court-approved public sale.
Its prospects then brightened additional in 2018, when Trump first imposed a ten per cent tariff on imported aluminium, defending it from overseas competitors. The smelter got here again on-line, turning into a poster youngster for the success of Trump’s tariff coverage.
However the optimism proved shortlived. Mag7 closed its doorways in January 2024, citing drive majeure over the frozen Mississippi, and all its 400 or so staff have been laid off.
“It’s like déjà vu,” mentioned Aaron Griffin, New Madrid’s metropolis administrator.
The closure was a giant setback for New Madrid County, a largely agricultural space with among the lowest median family incomes in Missouri. Officers say the native faculty system misplaced $1.3mn in tax income.
However the temper swung again to optimism when Trump, freshly reinstalled within the White Home, launched his new tariff blitz. Shares in Alcoa and Century Aluminum surged when he raised tariffs to 25 per cent.
“It does create a buzz, an atmosphere of go, go, go,” mentioned Lester. He mentioned there was now a “lot more interest” within the New Madrid plant from potential consumers.
The tariffs, mentioned Griffin, “are definitely worth a shot”. “They’ll create more of a level playing field,” he mentioned.
However others concern it’s too little, too late. “If the smelter had still been up and running when the tariffs were announced, they would have helped immediately,” mentioned Nick White. “By the time you put out bids to uplift it, you’re talking a year at the minimum, if not longer.”
Trump, he added, could be president for lower than 4 years, and what would occur if his successor was “less focused on this particular issue” than he was? he requested.
“Tariffs are hard to bet on,” mentioned Sartor. “Aluminium companies think decades out, and these tariffs could be in place for six years or just a few months.”
Locals additionally fear concerning the state of the plant, which is starting to point out its age.
“It was in good shape in 1979 when I was hired in,” mentioned Charles White, the retired employee. “But now it’s wore out.”
However the largest problem for any potential acquirer is to barter a good energy value. A neighborhood utility, Related Electrical Cooperative (AECI), has a 1,200MW coal-fired plant simply subsequent to the smelter. However individuals near Mag7 say AECI has informed it it has no energy accessible this yr or subsequent for the smelter. Different prospects reminiscent of information centres and crypto miners will pay rather more.
Specialists say the way forward for the US aluminium trade stays unclear. “Are tariffs the tool that will address the fundamental challenge of the primary aluminium industry, which is access to affordable electricity?” requested Sartor.
“I’m not certain they are.”
