SDI to Announce Location of New Aluminum Mill Soon

Site selection is wrapping up, and the purchase of equipment packages and major mill components has been completed over the past few weeks, SDI chairman, president, and CEO Mark Millett said on the company’s third-quarter earnings conference call on Thursday, Oct. 20.

The new mill, with an annual production capacity of 650,000 metric tons, will be built somewhere in the Southeastern US, as the company has previously disclosed. Two slab centers — one in Northcentral Mexico and the other in the Southwestern US — will supply half of the 900,000 metric tons of recycled slab the mill will require each year. The other 50% will be supplied onsite, SDI said.

SDI anticipates spending $2.2 billion over the next four years on the aluminum project and says it will be 100% funded by cash from its operations. For 2023, $750 million in capex funding is planned for the project.

SDI’s move into the aluminum market, which was announced in July, has already garnered “incredible interest” from customers and other interested parties. “We’ve had initial conversations with all but one major beverage outfits/can makers,” Millett said. “Also in automotive, several folks have approached us to partner with us going forward.” As for contract volumes and pricing, it’s still too early to say, he said on the call.

Millett sees many similarities between SDI’s entrance into the aluminum market and the start of the company in the early 1990s. The industry is currently saddled with aging facilities, high legacy costs, and inefficiencies. A new aluminum mill hasn’t been built in the US in 45 years, he said. Thus its entrance into this market is incredibly exciting and holds great opportunities for SDI, and it will serve as the company’s “foundation [for growth] for the next 25 years.”

By Laura Miller, Laura@SteelMarketUpdate.com