Steel Dynamics Inc. (SDI) states that the board has authorized the construction and operation of a 650,000 tonne recycled aluminum flat-roll mill and two support centers for recycled aluminum sheets. The company will invest an estimated $ 2.2 billion in the three plants, with commercial production planned to start in the first quarter of 2025. The project will be financed with available cash flow and cash flow from operations, SDI states in a news release about the investment.
Fort Wayne, Indiana-based SDI was founded in 1993 and is one of the largest and most diversified steel producers and metal recyclers in the United States. SDI produces steel with fewer carbon emissions using electric arc furnace (EAF) technology with recycled ferrous scrap as primary input. The company says it plans to bring steel to the minimum mill culture and associated operating efficiency to the flat-rolled aluminum industry.
This is not SDI’s first investment in the production of non-ferrous metal. In 2012, the company entered into a partnership with the Spanish company La Farga Group to establish SDI La Farga LLC, which produces copper wire from recycled copper at its plant in New Haven, Indiana.
SDI states that its steel customers are significant consumers and processors of flat-rolled aluminum products and seeks the company’s high-quality, sustainable, customer-centered approach in the market for flat-rolled aluminum.
“We are thrilled to announce this meaningful growth opportunity, which is in line with our existing business and operational expertise,” said Mark D. Millett, Chairman, President and CEO of SDI. “We have deliberately grown with our customers’ needs, offering efficient sustainable supply chain solutions for the highest quality products. So far this has primarily been achieved in the carbon steel industry – but a significant number of our customers with flat-rolled carbon steel are also consumers and processors of Today, we announce our plans to expand our ability to serve our existing and new customers by adding high-quality, low-carbon flat-rolled aluminum to our product portfolio.We are also pleased to further diversify our end markets with plans to deliver sustainable beverage industry. “
Millett adds: “We believe that our unique performance-based operating culture, combined with our significant experience in successfully building and operating cost-effective, highly profitable flat-rolled carbon steel plants, positions us exceptionally well to execute this strategic opportunity in an adjacent metal space and to deliver strong long-term value creation. ”
The planned flat-rolled aluminum plant will use what SDI describes as “a significant amount” of aluminum scrap, making it a complementary extension of SDI’s metal recycling platform, which operates primarily under the name OmniSource and is ranked as the largest non-ferrous metal recycler by car. shredding operations in North America on Recycling todayits 2021 list. SDI says that their metal recycling platform is expected to deliver 100 percent of the aluminum scrap needed for rolling mills and aluminum sheets.
The company estimates that the project will generate between $ 650 million and $ 700 million in annual earnings before interest, taxes, depreciation and amortization (EBITDA) on a cycle cycle basis.
SDI says that the North American flat-rolled aluminum industry has an estimated supply deficit of more than 2 million tonnes, mainly due to increasing demand from the automotive and beverage industry. This deficit is addressed through imports of more expensive flat-rolled aluminum products, which exceeded 25 percent of North American consumption in 2021, the company adds.
SDI says it plans to locate the $ 1.9 billion flat-rolled aluminum plant in the southeastern United States, and that the equipment contract has been awarded to SMS Group. The factory’s product offering will be supported by various value-adding finishing lines, including CASH (continuous annealing solutions heat treating) lines, continuous coating and various slitting and packing operations. The rolling mill is expected to start in the first quarter of 2025.
The company says it plans to use a significant amount of aluminum scrap before and after consumption in the production process. SDI, which cooperates with Unity Aluminum Inc. in a joint venture, will own more than 94 percent of the rolling mill. Ashland, Kentucky-based Unity’s employees provide significant operational expertise in the aluminum industry to the project, says SDI, and complements its own proven extensive design and operational talent.
In 2017, Unity Aluminum, formerly Braidy Industries, announced plans to build a 370,000 tonne per year aluminum plant near Ashland.
Barry Schneider, SDI’s senior vice president of the Flat Roll Group, sits on Unity’s board.
At full capacity, SDI’s aluminum rolling mill will require approximately 900,000 tonnes of annual supply of aluminum sheets, according to the company. The rolling mill will probably cover about 50 percent of its needs for recycled aluminum sheets on site, while the remaining amount will be covered by the construction and operation of two more satellite centers for recycled aluminum sheets: one to be located in the southwestern United States and the other in northern Mexico. The two plants are expected to cost approximately $ 350 million in total, with the Mexico plant expected to start operating in 2024 and the US plant by the end of 2025, says SDI. The company will own 100 percent of the satellite facilities.
The aluminum scrap for the Mexican sheet metal factory will probably be supplied by companies that SDI recently bought in Mexico to help secure first-class scrap for the Sinton, Texas, EAF steelworks. Earlier this year, SDI Roca Acero SA acquired the CV, which operates four scrap treatment plants, including at least one with an automation machine. SDI calls the facilities “strategically located near high-volume industrial scrap sources throughout central and northern Mexico.”
In 2020, the company Zimmer SA acquired the CV in Monterrey, Mexico, which operates a recycling business for ferrous and non-ferrous scrap metals. The company’s primary operations include six scrap treatment plants strategically located near high – volume industrial scrap sources throughout central and northern Mexico. The company also operates several third-party scrap treatment sites.
SDI sier Investment in aluminum production diversifies its end-market exposure by serving the growing North American beverage industry with its countercyclical characteristics. In line with their vision for their Sinton plant, SDI says it plans to invite customers to locate on-site facilities with the rolling mill to further improve customers’ cost-effectiveness, and offer a “closed loop” option for purchasing aluminum coil-to-roll. scrap.
Recycling today has contacted SDI for further information about the announcement.
