Aleris inks a $133M deal and the last chapter in a consolidation saga

Nov 11, 2005 | 08:07 AM | David Brooks

Last week's announcement that Ormet Corp., Wheeling, W.Va., will shut its Hannibal, Ohio, rolling mill might mark the end of what was seen as a much-needed consolidation of the aluminum rolling sector in the United States.

While Aleris International Inc., Beachwood, Ohio, will acquire the rolling equipment at Hannibal and install selected parts of it at its other plants-notably its Lewisport, Ky., facility-overall capacity will be reduced by about 250 million pounds. The reduction in production will be somewhat less because the Ormet plant has been operating at only 50 to 60 percent of capacity for the past year because of a prolonged strike.

This reduction in capacity, which analysts said affects mainly the common alloy market, follows a series of other closures and consolidations during the past few years that have served to rectify a problem of massive overcapacity that left many common alloy producers struggling for much of the last decade.

The process began in 2001 when Scottsboro Aluminum LLC in Scottsboro, Ala., closed. This was followed a year later by McCook Metals LLC, it's sister in the stable of companies belonging to controversial investment group Michigan Avenue Partners LLP, run by the equally controversial Michael Lynch.....