Steel Dynamics to build new aluminum mill
FORT WAYNE, Ind. (Inside INdiana Business) — Fort Wayne-based Steel Dynamics Inc. (Nasdaq: STLD) plans to invest $2.2 billion to build a recycled aluminum flat rolled mill, as well as two supporting satellite recycled aluminum slab centers, the company announced Tuesday. The steelmaker says when fully operational, the mill will have the capacity to produce 650,000 tons of finished products annually.
“Aluminum sheet actually has been on our radar for many years,” said CEO Mark Millett. “And the significant and growing North American supply deficit in aluminum flat roll makes this an ideal time to penetrate the market.”
During a conference call with investors Tuesday morning, Millett said he believes the project is a low-risk opportunity for the company.
“I think it should be considered as an adjacent business to our highly-successful steel operations with considerable overlap in process and operation know-how, commercial approach and raw material supply,” said Millett.
The flat rolled mill will be established in the southeastern part of the country, though a specific location has not yet been identified. The products made at the facility will serve the sustainable beverage packaging, automotive, and common alloy industrial sectors.
SDI says the mill will utilize a significant amount of aluminum scrap. OmniSource, the company’s metals recycling platform, is expected to supply 100% of the scrap aluminum needed for the new operations.
The facility is expected to be able to supply about 50% of its recycled aluminum slab requirements onsite, with the remainder coming from the two satellite recycled aluminum slab centers.
One of the satellite centers will be built in the southwestern part of the U.S., while the other will be built in north central Mexico. Like the flat rolled mill, specific locations for the centers have not been identified.
The company did not specify how many jobs would be created as a result of the project.
SDI says the flat rolled aluminum industry in North American has a growing supply deficit estimated at more than 2 million tons, with much of the demand coming from the automotive and sustainable beverage can industries.
“Automotive seems to be constrained by a lack of secured supply for its EV development,” said Millett. “The beverage can industry itself has been undergoing significant expansion and requires feedstock. It’s amazing to me that that industry today actually imports cans. You only get two tons of cans in a container today, and obviously that’s unsustainable. There’s a massive need for can stock, and we will help supply that.”
The flat rolled mill is expected to cost $1.9 billion, while the two satellite slab centers will cost about $350 million. SDI says it will fund the project through available cash and cash flow from operations.
When complete, the company will own more than 94% of the rolling mill facility through a joint venture with Unity Aluminum Inc. SDI will own 100% of the satellite facilities.
Operations at the Mexico slab center are expected to begin in 2024. The rolling mill facility is slated to begin operations in the first quarter of 2025, while the U.S. slab center will begin by the end of 2025.