Novelis could shift its product mix towards aluminum can sheet in response to market needs, but there are no current plans to build new can sheet capacity in the US, according to a senior company executive.
The Atlanta-based aluminum roller will look to change its manufacturing mix "when there are opportunities," Roxana Molina, senior vice president and chief procurement officer, said in a Nov. 9 interview. "If we can, we can change the mix. The other thing is we need to work very diligently in our operations to increase the output of our plants which is always possible."
Novelis transitioned its production mix towards can sheet and away from automotive sheet earlier this year during automaker shutdowns amid the coronavirus pandemic, Molina said, adding that the company's overall capacity and output mix have now returned to pre-pandemic levels.
"For Novelis, in North America, the economics are not there to increase capacity," Molina said. "We have several volume mills, and we will first make our contracts that we have with our customers.
Novelis CEO Steve Fisher reiterated the company's plans to optimize production, rather than add new can sheet capacity, during a call with investors Nov. 9.
"A greenfield investment is a difficult one because current can sheet prices in the North American marketplaces just wouldn't support that type of a project," Fisher said. "Right now, at least, until we see how things adjust over the next several years, we'll be much more focused on the debottlenecking investments to meet some of that increased demand."
Molina said there is "a shortage of can production, not a shortage of can sheet," which reduces the need to immediately build new can sheet lines.
With a lack of domestic aluminum can production to meet rising demand, Molina said can makers in North America have increasingly imported aluminum beverage cans this year fill in supply gaps.
US imports of aluminum cans not exceeding 355 ml capacity swelled 265.7% year on year to 638.5 million units in September, according to data from the US Census Bureau and US International Trade Commission.
Year to date through September, aluminum can imports have totaled 5.1 billion units, compared with 1.4 billion units in the same period last year.
Can imports through September of this year far surpassed full-year totals in 2018 and 2019, tabulated at 1.8 billion units and 2 billion units, respectively.
Source: Platts |
