Tinto Alcan Inc. plans to continue operating its casthouse in
Shawinigan, Quebec, through 2014 even as talks are already
under way with potential buyers for the facility, sources
familiar with the matter told AMM.
casthouse, which makes small-diameter billet not readily
available elsewhere, will maintain operations despite the
Montreal-based aluminum producer announcing that its Shawinigan
smelter will be shut down (
amm.com, Aug. 7), market sources said.
The Rio Tinto Alcan
release on the Shawinigan smelter closure did not mention the
casthouse, and the compnay and its London-based parent, Rio
Tinto Plc, did not respond to requests for comment.
It is unclear who will
operate the Shawinigan casthouse in 2015 and beyond, market
sources said. But Rio Tinto Alcan is exploring several options,
including a potential sale to a company that would operate the
casthouse while Rio Tinto would continue to market product from
the facility, they said.
parties are already in talks with Rio Tinto Alcan, market
sources said, but they declined to reveal those potential
buyers. Shawinigan has a good probability of being acquired and
continuing to operate because of the strong premiums that can
be fetched for smaller-diameter niche product, they said.
But there will be one
big change at the Shawinigan casthouse: instead of receiving
liquid metal from a smelter, the facility will operate as a
remelter, something that will slow and reduce output to some
extent, market sources said. But most Shawinigan casthouse
customers will continue to be served either from Shawinigan or,
if they purchase less niche items, from other Rio Tinto Alcan
operations, they said.
Rio Tinto Alcan is
probably not interested in holding the Shawinigan casthouse
beyond 2015 because a niche remelter operation likely would be
considered a noncore operation, market sources said, noting
that Rio Tinto is looking to divest noncore operations.
Shawinigan casthouse employees ranged from 60 to 80 people,
they said. The facility is akin to a "microbrewery" in the
billet world, according to one market source.
While other billet
production facilities may produce 5 to 7 diameters between 7
and 12 inches, the Shawinigan casthouse produces as many as 30
diameters between about 3 and 10 inches, with many focused on
the smaller end of the spectrum, market sources said. In some
cases molds are specific to customers and applications, a
situation roughly akin to a die caster having an extrusion die
for an individual client.
Key markets for the
products from the Shawinigan casthouse include hot and cold
forgings as well as small-diameter billet used to make aluminum
oxygen tanks and small propane tanks, market sources said.
Oxygen tanks and propane tanks may also be made from steel, but
when portability is an issue, aluminum tends to be the
preferred material, they said.
Rio Tinto Alcan has
called, met with and assured most Shawinigan casthouse
customers that they will continue to receive metal from the
company, market sources said. But a handful of customers will
no longer be able to source material from the operation, they
Some smaller sizes may
not be available in North America, market sources said.
Customers unable to secure metals from the Shawinigan casthouse
may look abroad for alternate suppliers, machine other billet
sizessomething that could prove expensiveor extrude
smaller rods, which may not work for all applications, they