Growing automotive demand turns Kentucky into an aluminium recycling and downstream hub

A report from the Aluminum Association ranks the state of Kentucky No. 1 nationally in per capita jobs creation in the aluminium sector. According to the Kentucky Cabinet for Economic Development, there are about 200 aluminium-related companies in Kentucky. About 100 new facilities or expansion projects in the recycling and downstream aluminium sector have been announced in Kentucky since the beginning of 2014.  The state has facilitated more than $3 billion in corporate investment and created over 3,050 full-time jobs in the sector.

With the curtailing of primary capacity in the US, many manufacturers shifted to recycled aluminium as their primary source material. This has driven the growth of a number of new recycling facilities and expansion of existing ones. They are primarily supplying to the growing automotive sector. Kentucky’s explosive growth in aluminium is mostly related to its growing role in the automotive industry.

“The aluminium boom is almost completely driven by auto-industry demand,” says Jack Mazurak, communications director for the Kentucky Cabinet for Economic Development.

Owl’s Head Alloys a secondary aluminium recycling facility in Bowling Green began a $3 million expansion in February 2018 with the aid of tax incentives from the Kentucky Economic Development Financial Authority. The project is expected to create as many as 17 jobs.

“A large part of our demand is for automotive aluminium,” said Kevin Mays, chief financial officer of Owl’s Head Alloys.

Mays pointed out that Owl’s Head’s site is a perfect location due to availability of affordable commercial property, proximity to potential automotive customers and economic transportation facilities via rail and road.

“As the aluminum industry continues to grow nationwide, the selection of our location in Kentucky almost seems to have been prophetic,” he said. He pointed out that they are now being able to cater to their growing customer needs more rapidly.”

A Recycling Today report called Kentucky “the geographic center of the majority of secondary aluminium producers in North America.”

After a record announced business investment of $9.2 billion in 2017, Kentucky has bright outlook for aluminium.

The biggest aluminium project right now is Braidy Industries’ $1.5 billion aluminium rolling mill that broke ground June 1 near Ashland in Greenup County. It will produce aluminium sheet and plate for the automotive, aerospace and defence industries and will consume a large volume of primary and secondary aluminium.

Though primary sector is growing slow, the US will continue to be one of the hottest players in the aluminium game supported by growing demand and expansion of recycling and downstream sector.