The Alumina Chronicles:
Rolling Mills - 30 Years In The USA
January/February of 2020
The expansion at JW Aluminum in Goose Creek, South Carolina, included the two structures at the top of this photo.
A portion of the property is being utilized as a scrap aluminium receiving area. The firm indicated that when it
starts operating the new equipment in mid-2020, JW Aluminum will be using 100% scrap at this facility.
(The photograph was produced by Mr. David Tracy in December of 2019, and provided by JW Aluminum.)
Aluminium rolling mills have been part of the manufacturing base of the United States of America for decades. According to a report issued by The Aluminum Association in 2008, “Hot and cold continuous sheet rolling mills came into operation in the United States in 1926. The maximum speed of the first USA cold ‘strip’ mill was reported to be only about 200 feet per minute (60 m/min.)…The rolling industry switched from steam engines to electric power; it built specialty mills, and bigger multi-purpose mills.”
As the American economy became more globalized in the past 30 years, the aluminium industry has adapted to the new market conditions. In some cases, that has meant the closure of aluminium rolling mills that had been in operation for years. A number of communities that grew up around these mills saw great impacts – negative impacts – as the mills closed.
The industry has also seen consolidation among aluminium companies with operations in various nations around the world. Subsidies by governmental entities, such as those provided in China, as well as tariffs have also impacted the markets supplied by aluminium rolling mills.
“Weak demand across most of the major end-use markets has resulted in the 4th consecutive downgrade to world aluminium rolled products consumption growth,” stated Mr. Doug Hilderhoff, Principal Analyst – Head, North America Aluminum of CRU Group. “CRU forecasts consumption to grow by 2.0% in 2019 compared to our prior estimate of 3.1%.”
“While conditions have mostly held flat in Europe and North America, major downgrades have been made in China throughout the forecast period,” Mr. Hilderhoff continued. “From an end-use perspective, the biggest downgrade was made to foil stock consumption, driven by weaker demand prospects in China, India, and North America. Global consumption from the construction and transport sectors have also been revised downward, although there are signals that both markets have bottomed out.”
Mr. Hilderhoff noted that “The one bright spot has been the packaging market, particularly in North America, where the consumer-led war on plastics and new beverages are expected to add incremental growth to can sheet demand.”
China continued to have impact throughout global markets, including impact on the aluminium rolling industry in the USA.
“Chinese investments in rolling capacity continue to pile up despite ongoing challenges associated with weaker domestic demand, and resistance from traditional export partners,” according to Mr. Hilderhoff. “Chinese rolling capacity is expected to grow by more than 14% between 2019-2024.”
“The massive growth in Chinese sheet and plate exports seen over the past 2 years to places like the EU, Mexico, and Brazil have certainly grabbed the attention of rollers operating in those countries,” Mr. Hilderhoff continued. “The EU market in particular has been inundated by Chinese product, forcing rollers to look elsewhere (i.e. the USA) for sales. With the USA market now overflowing with inventory, many wonder whether the attention will shift back to the domestic markets in Europe, with the possibility of trade actions being explored.”
Sales to customers in the USA from European rolling mills are anticipated to decline during 2020.
“There has been some good news for European rollers of late, with Chinese exports beginning to fade since the middle of 2019,” stated Mr. Hilderhoff. “Through September, Chinese exports of sheet and plate are down 3%. Although Chinese exports to the EU are up more than 100% through September compared to 2017 levels, the pullback over the past few months is an encouraging sign for European rollers. Continued declines will be necessary to bring a sense of balance back to Europe, especially with the expectation for weaker EU exports to the USA in 2020.”
One of the European firms that has continued to see strong demand for their aluminium sheets is Norsk Hydro ASA, according to Dr. Peter Heimerzheim, Team Lead Germany, Communication and Public Affairs. The firm operates globally and has two aluminium rolling mills in Norway and four aluminium rolling mills in Germany.
“Our product quality in some areas is still unbeaten so USA companies ask us to export the products from Europe to their USA facilities,” stated Dr. Heimerzheim. “USA-based companies use our aluminium to produce for customers in the USA, but also for customers in other parts of the world.”
A number of businesses with rolling mills in the USA also project long-term opportunities to grow their operations in America. Several firms have been and are investing large amounts of money to expand and enhance aluminium rolling mills in the nation.
Operations are seen here at Logan Aluminum, a joint venture of Tri-Arrows Aluminum and
Novelis, in Russellville, Kentucky. According to the firm, Logan Aluminum is a
leading manufacturer of flat-rolled aluminium sheet, primarily in the beverage can market.
(Photograph was provided courtesy of Tri-Arrows Aluminum Inc.)
Tri-Arrows Aluminum Inc. is one of those businesses.
“Business has been very strong,” stated Mr. Matt Bedingfield, Chief Commercial and Strategy Officer of Tri-Arrows Aluminum. “We have been a core supplier to the aluminium can market for over 30 years. Recently, we’ve invested over US $400 million to increase our capacity and capabilities to better serve this market.”
Customers at Tri-Arrows Aluminum include both the can makers who actually manufacture the cans and the brands that sell the finished goods, according to the firm.
“Tri-Arrows is focused on North America,” explained Mr. Bedingfield. “Given the issues around plastic sustainability and the recognition of the great aluminium sustainability, demand is very strong in the USA; with strong demand, there is no reason to export. While Tri-Arrows is focused domestically, our majority owners, UACJ, supply globally.”
Mr. Bedingfield indicated that the market for aluminium can sheet “is stronger than it has been in recent memory.”
“The can sheet market is a very dynamic one at the moment,” noted Mr. Bedingfield. “The confluence of tariffs, automotive demand, and consumers demanding sustainable packaging options has created a very robust demand environment. While the tariff environment is difficult to predict, we don’t see automotive demand or the shift toward more sustainable packaging slowing down anytime in the coming years.”
Recycling is an important component to operations at this firm, with Tri-Arrows Aluminum indicating that it is one of the largest aluminium recyclers in the world.
“We just completed an investment at our mill, Logan Aluminum, that allows us to take used beverage cans directly into our process to produce can sheet creating a completely closed loop,” stated Mr. Bedingfield. “This investment allows us to reduce our product’s overall carbon footprint, gives us greater flexibility and security of supply for our inputs, provides an end use market for the aluminium can, and creates the sustainability story for the aluminium can that is driving so much of the demand we are seeing in the marketplace. The ability to create this closed loop is what sets aluminium apart from all other substrate choices for packaging. Recycling is at the absolute core of what we do.”
Another firm making a major investment in the expansion of an aluminium rolling mill is JW Aluminum. The business is constructing “a new 220,000 square foot building and installing proven, state-of-the-art equipment utilizing green technology” at its site in Goose Creek, South Carolina, according to JW Aluminum.
The firm indicated that it is investing more than US $250 million in this expansion, with phase one anticipated to be completed in 2020; phase two is planned for completion by 2022. According to JW Aluminum, the expansion will result in 175 million pounds of new capacity.
“It’s an exciting new chapter in JW Aluminum’s story and a considerable progression in our strategic journey,” stated Mr. Lee McCarter, Chief Executive Officer of JW Aluminum. “The outcome of this endeavor will empower us to produce superior product for our customers, provide increased value to our stakeholders and serve as a preferred supplier for decades to come.”
In addition to the Goose Creek location, JW Aluminum operates aluminium rolling mill plants in Russellville, Arkansas; Saint Louis, Missouri; and Williamsport, Pennsylvania.
This image is a rendering of the planned Braidy Atlas Rolling Mill facility near Ashland, Kentucky.
According to the firm, this facility is anticipated to produce 300,000 annual tons of aluminium
sheet for the automotive and beverage can industries. The Braidy Atlas Mill is scheduled to open in 2021.
(Image was provided by Braidy Industries.)
Locales with existing aluminium rolling mills are not the only places where expansion is taking place in the USA.
The growth potential for aluminium rolling mills in the USA is also seen in Greenup County, Kentucky. Located near Ashland and in the heart of coal country, this area has been reeling from changes in customer demand and governmental regulatory requirements for coal.
It is here that Braidy Industries is in the process of building the Braidy Atlas Mill.
According to Mr. Craig Bouchard, Chief Executive Officer of Braidy Industries, this “state-of-the-art, low-emissions aluminium rolling facility positions Braidy as the low-cost, low-carbon maker of 300,000 annual tons of production-ready series 3000, 5000 and 6000 aluminium sheet for the automotive and beverage can industries.”
The Braidy Atlas Mill is scheduled to open in 2021.
In the Spring of 2019, Braidy Industries and United Company RUSAL (Rusal) announced a “US $200 million lead investment in the Braidy Atlas Mill. In exchange for its investment, Rusal will obtain a 40% share in the Braidy Atlas Mill.”
“Given that the Braidy Atlas Mill is the first greenfield project in North America in over 37 years, it goes without saying that the industry is outdated and not prepared to meet the demands of a lower-carbon future,” Mr. Bouchard continued. “Braidy Atlas customers will include the top worldwide automotive OEMs, some of the largest metal service center companies, as well as major food and beverage companies, where cost-efficiency and packaging sustainability are a predominant focus.”
As part of its growth plans, Braidy Industries acquired NanoAl and Veloxint. NanoAl is “pioneering aluminium superalloys through advanced materials and nanotechnology research,” according to the firm, while Veloxint “provides high performance products and parts enabled by our novel nanocrystalline metal alloys.”
Mr. Bouchard indicated that these acquisitions “enable Braidy Industries to provide lightweighting solutions to a wider swath of tool makers, and automotive manufacturers in the United States and abroad, who will build vehicles that are safe, strong, and reliable, while achieving a lower carbon footprint to meet consumer expectations as well as the ever-changing regulatory and environmental standards of the modern marketplace.”
Braidy Industries is looking long-term for growth in the USA.
“The Braidy Atlas mill capacity is approximately 200% pre-sold, utilizing non-binding and binding commitments to private industry customers for the first seven years of production,” stated Mr. Bouchard. “Braidy Atlas plans to become the first rolled products aluminium sheet producer to use 100% low-carbon inputs on an ongoing basis from its inception.”
These investments in aluminium rolling mills are substantial and will likely result in continued and enlarged employment opportunities for workers in these locales, but it should be noted that the overall workforce in the aluminium industry has been in decline for years in the USA.
While demand for aluminium is likely to continue to increase in the USA, the size of the overall workforce in the industry is projected to continue to decrease in the years ahead.
According to the United States Bureau of Labor Statistics, the workforce in the Alumina and Aluminium Production and Processing Industry has been in decline for a number of years. The Bureau has projected that the workforce decline will continue through 2028.
(The Bureau combines a number of sectors of the aluminium industry together for statistical analysis. Aluminium rolling mills are but one of the sectors included in these statistics.)
The Bureau indicated that there were 66,100 workers in the Alumina and Aluminium Production and Processing Industry in the USA in 2008, while that number dropped to 58,100 workers in the overall industry in 2018. In November of 2019, the Bureau issued projections that there will be 52,800 workers in the Alumina and Aluminium Production and Processing Industry in 2028.
The years since 1989 have been ones of great challenges, disappointments, successes, and opportunities for the aluminium rolling industry in the USA. While the next 30 years will undoubtedly have similar ups and downs as specific markets expand and contract, leaders within the aluminium rolling industry anticipate that aluminium will continue to play a major role in the USA as well as globally.
Do you have questions about the aluminum industry?
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Contact Richard McDonough at aluminachronicles@gmail.com.
© 2020 Richard McDonough