ISLE OF PALMS, S.C. The
aluminum industry is prepared to meet increasing demand from
the automotive industry and other potential growth markets,
industry executives say, either by adding new rolling capacity
or expanding or retooling existing facilities.
There currently is enough
capacity to meet aluminum demand from the automotive sector,
Randall Scheps, director of automotive marketing at
Pittsburgh-based aluminum producer Alcoa Inc., said during a
roundtable discussion at the Aluminum Associations spring
meeting in Isle of Palms.
The trick will be engaging
customers early enough in the development process to determine
whether and when new capacity might be necessary, he said. "We
cant have them calling 12 months before they need 100
million pounds of metal. But certainly, if they call us three
years ahead of time we can make it happen either by adding new
rolling capacity or converting existing capacity from one
market to another."
Alcoa is in the process of
investing $300 million in its rolling mill in Davenport, Iowa,
to serve the auto industry, Scheps noted. "We believe that some
of our competitors are doing the same levels of investment.
Certainly, to serve the auto market there has been major, major
investmentand we believe there will be more in the
Scheps remarks came after
Alcoa chairman and chief executive officer Klaus Kleinfeld said
the companys Davenport facility wont be enough to
meet future demand from the auto sector (amm.com,
"When you are making a car,
there are like 3 million pieces that come together. You
dont do that in a day," an Alcoa spokesman said. "That
lead time is very long, so the sooner (automotive firms) get
their partners involved, the better off they are. And
thats whats happening todaya fundamental
change thats happening."
Both Scheps and the spokesman
declined to comment on whether any particular automotive
company or supplier might be looking to boost aluminum
requirements for a new product or vehicle model.
North American primary aluminum
production also can be expanded, said Jean Simon, president of
primary metals at Montreal-based Rio Tinto Alcan Inc., which is
already spending $3.3 billion to modernize its smelting
operations in Kitimat, British Columbia, a process that should
be completed in 2014.
"We are in a good position to
follow the market, and there are other projects that we have in
hand," Simon said, although he noted that the company has been
cautious to add additional tonnage in the wake of the
recession, despite positive forecasts.
Other possible expansions
include Rio Tinto Alcans AP60 Technology Center, which is
expected to begin operation in mid-2013, as well as its Alma
smelter in Quebec, which has a nameplate capacity of 438,000
tonnes per year (amm.com, Aug. 29). "Nothing has been
announced. It is just looking into the future," Simon said.
"We will balance our potential
move with the demand for aluminum in the coming years," he
said. "But the point is, there is potential in North America to
continue to provide primary aluminum."
Noranda Aluminum Holding Corp.
also is expanding. The Franklin, Tenn.-based company has
announced a $45-million investment in a new rod mill, a
$38-million project to boost productivity and capacity at its
smelter in New Madrid, Mo., and also plans to invest $20
million in a port expansion in Jamaica, said president and
chief executive officer Layle "Kip" Smith. Combined, the
projects represent "another positive story about investment,
growth in capacity and jobs."