Steel Dynamics plans to invest $2.2 billion in building recycled aluminium facilities

On July 19, Steel Dynamics Inc. headquartered in Fort Wayne, Indiana announced an investment of US$2.2 billion to construct a flat rolled mill for recycled aluminium alongside two satellite recycled aluminium slab units to aid in production. The firm has confirmed that the mill harnesses the capacity to produce almost 650,000 tonnes of completed profiles, each year.

The flat-rolled mill has land allotted in the Southeastern regions of the USA, with no specifications released about the address yet. The manufactured profiles at the unit would be utilized vastly by the automotive sector, some common alloy industries and beverage packaging facilities looking for sustainability.

SDI is an international provider of work solutions and acts as an employee portal. It has been estimated that the mill will require a substantial amount of aluminium scrap. The company’s metals recycling division, OmniSource has the order to supply 100 per cent of the scrap aluminium to be sourced by the unit to run activities.

The unit will manufacture 50 per cent of recycled aluminium that it needs in-house, while the rest will come flowing through the two auxiliary recycled aluminium slab facilities.

Out of the two satellite centres, one would be located in the Southwestern part of the US and the other one will be constructed in central Mexico. Similar to the flat-rolled mill’s location, the address of these satellite slab centres has not been disclosed.

The CEO of Steel Dynamics, Mark Millet exclaimed: “Aluminum sheet actually has been on our radar for many years. And the significant and growing North American supply deficit in aluminium flat roll makes this an ideal time to penetrate the market.”

While in a conference call with investors on July 19, Millet claimed that he is hopeful about the project as it does not pose a great threat to 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,” Millett further illustrated.

The company has not released any job notifications as of now and has yet not made any statement about how many titles are going to be open.

SDI with calculated data says that the flat-rolled aluminium industry in North America is running low on supplies by at least 2 million tonnes. The demand for rolled aluminium products mainly arrives from the automotive sector and the beverage can industries searching for sustainable materials.

Millet also took the liberty to explain: “Automotive seems to be constrained by a lack of secured supply for its EV development. 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.”

This flat-rolled mill is estimated to account for US$1.9 billion with the other two satellite slab centres costing almost US$350 million. SDI has reassured that it will pay for the project with the cash at disposal and cash inputs from other works.

After finishing construction, the company will have a proprietorship of 94 per cent of the rolling mill unit under a joint venture signed with Unity Aluminium Inc., while SDI will have 100 per cent ownership of the satellite hubs. 

The Mexico slab centre will be fully functional from 2024 as estimated by the firm. The rolling mill unit is scheduled to churn outputs in the primary quarter of 2025 and the U.S. slab centre will start producing near 2025’s end.