NEW YORK Novelis Inc. is
looking to set up closed-loop scrap supply chains with its
North American automotive aluminum customers to meet an
anticipated increase in automotive sheet demand in 2013.
Derek Prichett, vice president
of global recycling at the Atlanta-based company, told
AMM that the company sees "a similar model to the way
that the can sheet business works."
"The story in the North American
market is the rapid growth in auto demand. Thats
obviously going to drive increased sales of flat-rolled sheet,
but it will also drive the generation of more scrap," he said.
"Were looking at setting up closed loops with auto
customers to obtain their scrap for converting it back to
automotive sheet again."
The move comes as Novelis
continues its pursuit of 50 percent recycled content in its
products by 2015 and 80 percent recycled content by 2020. The
company also has a goal of increasing its use of non-can scrap
from 1 million tons in 2011 to 2 million tons annually by 2015
and 4 million tons by 2020 (
amm.com. Nov. 9, 2011).
Prichett said the company
expects to announce another increase in its recycled content
use in March, having surpassed the 40-percent mark in
Scrap market sources contacted
regularly by AMM claim that Novelis now frequently
leads the market in the pursuit of aluminum scrap, with Novelis
president and chief executive officer Phil Martens
acknowledging in August that the company has been "very
aggressive" in its approach (
amm.com, Aug. 14).
Prichett said that Novelis
diversification into using more non-can scrap will help keep
purchasing costs at a manageable level. "Were going to be
an active buyer in the scrap market for all different types of
scrap," he said. "Our objective is to pay at the market rate,
Prichett said the company will
have to add scrap processing capacity in all of the regions in
which it operates, including North America, to reach its goal
of 80 percent recycled content by 2020. "Weve announced
major expansions on three major continents, and were now
actively looking at options in North America," he said. "We
were buying 1 million tons of aluminum scrap worldwide, and
were looking to get to 4 million tons by 2020. We
dont have that much idle capacity sitting in any of our
regions right now."
He added that Novelis
doesnt expect any "major dislocations in prices" to occur
in the coming year. "We expect to be able to buy everything
that we need and more."