New Michigan Aluminum Plant to Go Live in Fall 2023

In the past, I’ve had the pleasure of interviewing associates of Hydro, a Norwegian company specializing in low-carbon and recycled aluminum products. Getting their insight into the aluminum industry provided MetalMiner and our readers with valuable industry information. For instance, we’ve learned about Russian metal sanctions, how low-carbon aluminum prices compared to those of regular aluminum, and what aluminum buyers should anticipate regarding geopolitical factors impacting the global aluminum industry.

Recently, I had the pleasure of interviewing Eivind Kallevik, Executive Vice President of Hydro Aluminium Metal. Specifically, I aimed to gain more insight into the construction of a new Hydro facility in Cassopolis, Michigan. Currently, the company expects production at the facility to start in the fall of 2023. However, I wanted to better understand how this new aluminum facility could help aluminum buyers within the U.S. I also wanted to get Eivind’s input on a possible recession within the U.S. and how this might negatively impact U.S. aluminum buyers.

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Interview: A Look into Hydro’s Perspective on the Aluminum Market

Q: I would like to hear about the ways this new plant incorporates state-of-the-art technology into its aluminum smelting. Also, what does this new facility offer in terms of recycling tech compared to other Hydro plants?

A: Hydro has developed superior de-lacquering and melting technologies. This process involves the energy output from the combustible contaminants during de-lacquering being directly used for melting. This reduces energy consumption by 30% while also improving metal recovery. We have been producing Hydro CIRCAL® in Europe for several years. Our technology enables us to melt more challenging types of post-consumer scrap. We have also developed technology that allows us to dig deeper into the scrap pile to conserve aluminum that would otherwise end up in landfills.

Additionally, our employees have industry-leading skills. And by applying the best practices of their European colleagues. This includes our Commerce, TX and Henderson, KY facilities have now certified their plants to produce Hydro CIRCAL®. 

Our Cassopolis, MI, plant will be the first to produce Hydro CIRCAL® at a large scale. This will hopefully reflect in aluminum prices. We are planning to bring our superior de-lacquering and remelting technologies from Europe to enable the annual production of 40,000 tonnes of Hydro CIRCAL, with a total production capacity of 120,000 tonnes of recycled aluminum.

Aluminum Prices and Aluminum Production: Is the U.S. Economy Having a Negative Impact?

Q: How are current recessionary conditions negatively impacting aluminum costs, production, and the market at large? How could this new plant help ease that?

A: What we have seen on the production side is that high energy prices in Europe and the U.S. have unfortunately led to the curtailment of some primary production. We have seen softness in some elements of the aluminum market. However, overall demand for aluminum and aluminum products still remains high. This is particularly true in the automotive segment, as manufacturers ramp up production of battery electric vehicles. This has a higher aluminum content than internal combustion vehicles. What we will be able to do in Cassopolis is produce, through recycling, particularly of post-consumer scrap, the material necessary to meet this growing automotive demand. 

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Q: How will the new facility benefit U.S. aluminum buyers? For example, LME aluminum stock levels are desperately low. Perhaps this will help?

A: What we hear when we talk to customers in the U.S. is two things – they prefer local supply if they can find it, and they need to meet the challenge of green demand from their customers. We hear more and more that the end-user is looking for low-carbon and recycling-based solutions. Our Cassopolis facility meets both of these challenges. It is in the U.S., in Southwest Michigan, more or less in the heart of U.S. manufacturing. And we will be able to deliver our Hydro CIRCAL® product at scale, with the lowest CO2 footprint of any product in the market today.

Q: The economy is falling in the U.S., and our customers are worried about saving money. Is green aluminum more cost-effective in recessionary times?

A: I might disagree with you a little bit. While we do see that growth has slowed in the U.S., the latest figures do not show it in contraction, so it is not a falling economy as such. Of course, inflation is a challenge for everyone. As discussed in our most recent earnings report, we at Hydro are facing higher costs in our operations as well. When you look at primary production of aluminum, the largest cost element typically is energy.  One of the many great things about recycling aluminum is that it takes only 5% of the energy required to make primary aluminum. Combine that with the ability to return scrap to new useful products rather than end up in the landfill, and recycling can be a very cost-effective solution.

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