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Aluminum Extrusions

A Brief Calm

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MCN Editor Dan Markham The market for aluminum extrusions has softened a bit, but Hydro doesn’t anticipate that lasting too long. 

The aluminum extrusion space may be in a bit of a lull in 2024, but the long-term outlook for most products is quite bullish. 

That’s the assessment of Mike Stier, vice president of finance and strategy for Hydro, the leading producer of extrusions in the nonferrous world. 

“Coming into this year, we were maybe a little more optimistic about the back half. But what I see in the Fed rates and a little bit of pre-buy happening with imports and trade cases, I think it’s going to be a sluggish response that will have little effect on the back half. It will be about flat,” he said. “It could show a slight uptick year over year just because Q3, Q4 last year were so soft as well.”

The forecast is built on major end markets that are not at their strongest. Stier points to some pullback in the transportation segment, most notably commercial trailer and the RV markets. Building and construction is also off, which should remain the case in residential given mortgage rates will stay elevated for now. 

Similarly, there’s a softening of expectations on electric vehicle growth, where extrusions have a larger share. “There’s definitely higher application rates than with ICE,” Stier says. 

But for EV, as with extrusions as a whole, this may represent a modest roadblock on an overall smooth drive ahead. That the long-term outlook for the segment is positive is undeniable. 

In addition to the greater share of the specific EV market, extrusion makers anticipate the product will play an integral role in all of the push to electrification. “With aluminum’s conductivity benefits, [electrification] is going to continue to drive demand increase long term,” he says.

Growth in the renewables space, including solar panel applications, will similarly goose consumption. “The whole energy and power space is one we’re going to see additional growth in,” he says. 

The industry as a whole has been keeping a close eye on an active trade case involving aluminum extrusions from China, Indonesia, Mexico and Turkey. The Commerce Department found the four countries had unfairly subsidized their domestic industries and recommended countervailing duties ranging from a low of 1.45 percent on some Chinese products to almost 170 percent on some Chinese made extrusions. 

“We are encouraged that the Commerce Department has taken preliminary action to remedy the unfair and illegal subsidization of aluminum extrusions from China, Indonesia, Mexico, and Turkey,” said Robert E. DeFrancesco, trade counsel to the petitioners and a partner in the international trade practice at Wiley Rein LLP, which represented the Aluminum Extrusion Council and other petitioners in the case. 

Final determinations are expected in July 2024, two months after a ruling on antidumping duties on these four countries plus 10 others. 

Regardless of how the trade case plays out, the nonferrous industry will need to continue to grow to meet the long-term supply challenges. That’s being addressed through a number of  projects in various stages. “Not only us, but there is a lot of investment into this space. Announcements continue to come out both with upstream and extrusion capacity and raw material processing capacity,” Stier says. 

In the fall, Hydro opened a new recycling facility in Cassopolis, Mich., its third greenfield facility in the U.S. and 11th overall. The site will produce 265 million pounds of aluminum extrusion ingot annually. It is the first U.S. site that will produce CIRCAL, Hydro’s new product that uses 75 percent post-consumer aluminum scrap. 

It’s a sign of the company’s confidence in the market, both overall and here in the U.S. 

“I hope the softness doesn’t drag on too long,” Stier says. “We’re kind of at the bottom of the demand curve, but with a bright future.”

Vista Building New Facility
Vista Metals will construct a new facility in Bowling Green, Ky., to supply specialty aluminum products to the aerospace industry. With nearly a $60 million initial investment, the new site will primarily support downstream processing and value-added products serving the aerospace extrusion, forging and rolling markets. 

The new facility is part of Vista’s long-range investment plan, which includes the completion of the company’s recent aerospace casthouse, its seventh, in Georgia. The company also operates a facility in California. 

In addition to supporting commercial aviation, the new location will also support defense, automotive and general industrial applications. Initial site preparation is now under way and Vista Metals will commence a phased build-out to support the growth in its core markets.

“The opening of Vista Metals in Kentucky underscores our commitment to the aerospace industry and our recognition of the importance of delivering robust supply chains,” says Kelly Thomas, president of Vista Metals. “This strategic investment will further support our customers’ growth in aerospace as OEMs look to more than double commercial aircraft build rates over the next two decades. Given the recovery in the markets and strong long-term growth outlook, our intent is to invest in a manner that will enable customers to test and qualify this facility ahead of the projected growth surge, along with ongoing investments in our people, processes and equipment at our existing facilities.

In addition to the Georgia project, Vista has introduced the largest forging ingot in the western world, the company claimed. The billet was developed to supply aluminum forging applications serving the needs of the aerospace, industrial and power generation sectors.

The new 52-inch-diameter forging ingot represents the largest raw material input weight for forging applications currently offered in the market. It is cast at a 52-inch diameter with a weight of approximately 50,000 pounds. It is finished at 48 inches in diameter and weighs up to 30,000 pounds.

“At Vista Metals, we pride ourselves at anticipating market needs and creating those capabilities to make our customers more successful. This is another great example of Vista Metals aggressively investing in the future,” says Bob Praefke, executive vice president of Vista Metals.

Caption:
Remelt takes place at Hydro’s casthouse in The Dalles, Ore. (Photo courtesy Hydro)


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