SDI to build US aluminum sheet mill, slab plants

Market: Metals
19/07/22

US steelmaker Steel Dynamics (SDI) will break into the wrought aluminum sector by building a new flat-rolled aluminum mill in the southeast, with two supporting satellite recycled aluminum slab centers.

The 650,000 metric tonne/yr mill and recycling facilities would cost $2.2bn and production is expected to begin in the first quarter of 2025.

The company cited a 2mn t flat-rolled aluminum deficit driven by growing demand from the automotive and beverage can industries. A lack of capacity is also said to be impacting automotive producers' ability to secure supply. Many of SDI's steel customers are also involved in the aluminum industry, particularly automotive-related businesses.

The mill's planned product mix will be 45pc can sheet, 35pc automotive, and 20pc common alloy.

SDI will hold a 94pc stake in the rolling mill facility with Unity Aluminum owning the remainder.

Unity Aluminum has been trying to build its own aluminum rolling mill in Kentucky since 2017.

The aluminum mill will cost $1.9bn to build and will have continuous annealing solutions heat treating lines, continuous coating, and various slitting and packaging operations.

The mill is expected to require 900,000 t/yr of aluminum slabs, of which half will come from on-site sources and the remainder will be supplied from two slab centers, with one located in the southwestern US and another in north central Mexico. The two facilities will cost $350mn, with the Mexico plant to begin operations in 2024 and the US facility at the end of 2025. SDI will own 100pc of both plants.

SDI's recycling arm, OmniSource, will provide 100pc aluminum scrap needs to the facilities. SDI will target 80pc recycled content for its can sheet production.

OmniSource also owns Superior Aluminum Alloys in New Haven, Indiana, which converts obsolete aluminum scrap into cast alloys, mostly for the automotive industry.

The SDI announcement joins other recent investments, including US-based packaging firm Ball partnering with Manna Capital Partners to build a greenfield rolling mill in Los Lunas, New Mexico. The plant is expected to be operational by 2026 and will include recycling and hot mill operations, adding yet another consumer to a crowded US scrap market.

Over the past few years, US demand for aluminum beverage can (UBC) scrap has been on the rise as Arconic has ramped up can sheet operations in Tennessee and JW Aluminum has been buying cans to produce non-packaging aluminum sheet products in South Carolina.

In May, Novelis announced it will invest $2.5bn to build its own greenfield rolling mill in Bay Minette, Alabama, focused primarily on beverage can sheet.

By Rye Druzin

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