Metals

Novelis reports progress in aluminum recycling

Atlanta-based aluminum rolling and recycling company Novelis has published its 2015 sustainability report, detailing what it says is significant progress toward increasing recycled aluminum use and using natural resources more efficiently. At the end of fiscal 2015, the company says it has achieved an average of 49 percent recycled aluminum inputs, up 19 percentage points from the baseline years of 2007-2009, and a reduction in water use by 22 percent.

Over the past five years, Novelis says it has doubled its recycling capacity, helping to reduce its greenhouse gas (GHG) emissions by 13 percent from baseline. Recycling aluminum produces 95 percent fewer GHG emissions and requires 95 percent less energy than primary aluminum production, enabling Novelis to achieve lower GHG emissions despite increasing global production capacity, the company says.

“Novelis’ commitment to sustainability is fundamental to our success as the global leader in aluminum rolling and recycling,” says Steve Fisher, president and chief executive officer, Novelis. “Our continued focus on sustainability enables us to provide the lower carbon, high recycled content products our customers demand and provides a source of competitive advantage in the markets we serve.”

The report highlights other company achievements from fiscal 2015, including:

• Novelis opened an aluminum recycling center in Nachterstedt, Germany, that can process up to 400,000 metric tons of aluminum scrap annually, which the company says advances its progress toward increasing recycled inputs, saves 3.7 million metric tons of carbon dioxide emissions per year and sets a global standard for aluminum recycling.
• The company supplied lightweight automotive aluminum for the Ford F-150, America’s best-selling truck, thereby eliminating 700 pounds from the vehicle and making it highly fuel efficient. Novelis and Ford established a closed-looped recycling system for manufacturing scrap.
• The company expanded its portfolio of certified high-recycled aluminum products, including beverage can sheet and the introduction of evercycle™ for food containers. The evercycle aluminum sheet, which is certified by SCS Global Services to contain 100-percent-recycled aluminum, represents a breakthrough in the food containers category, which has been made historically from primary aluminum-based alloys or lower amounts of preconsumer recycled content, according to Novelis.
• Since 2011, Novelis says it has invested approximately $2 billion to expand its recycling and production capacity. The company says it looks forward to applying its new capabilities to the fullest extent, driving operational excellence and delivering the highest quality, sustainable products to its customers for years to come.
• The company improved water efficiency, which is critical to its operations, particularly in areas of the world affected by drought, such as Brazil. Its plant in Pindamonhangaba, Brazil, made significant water efficiency improvements, including automation of its industrial and drinking water systems, helping Novelis to reach an overall 22 percent reduction in water use.

Novelis says it continues to make progress in multiple areas of its operations, including reducing GHG emissions, energy and water use from its baseline.

Novelis says it aligned the “2015 Novelis Sustainability Report” to conform to the Global Reporting Initiative (GRI) G4 Sustainability Reporting. The GRI G4 guidelines are the world’s most widely used framework for sustainability reporting, according to the company.

The report and supporting documents can be downloaded at www.novelis.com/sustainability.

Steel associations present united front on China

According to EUROFER, the Brussels-based European Steel Association, it was joined by eight regional steel associations—the American Iron and Steel Institute, the Steel Manufacturers Association, the Canadian Steel Producers Association, CANACERO (Mexican Iron and Steel Industry Chamber), Alacero (Latin American Steel Association), Instituto AcoBrasil (Brazil Steel Institute), the Turkish Steel Producers Association and the Committee on Pipe and Tube Imports—in presenting a unified position on the negative impact of granting China market economy status (MES) in December 2016.

Presentations at the Dec. 1, 2015, event in Paris reviewed the continued significant role of the state in the Chinese economy, the resultant growth in Chinese steel overcapacity and the surge in Chinese steel exports to world markets in recent years. Representatives from the various regional associations detailed the negative consequences that would result from granting China MES before Chinese market-distorting policies were fully reformed.

Eurofer says, given the continuing significant role of the Chinese state in many key aspects of the Chinese economy, especially in its state-owned and controlled steel sector, China unquestionably remains a nonmarket economy.

The regional steel associations continued to urge governments around the world to undertake comprehensive assessments of the continuing role of the state in the Chinese economy and the steel industry, as well as the impact on industries around the world, if China were to be treated as a market economy before making the reforms necessary to ensure that market forces were allowed to operate fully in the Chinese economy.

Alcoa to cut additional capacity

Alcoa, with headquarters in New York and Pittsburgh, has announced additional measures designed to increase the competitiveness of its Upstream business amid prevailing market conditions.

Alcoa will permanently close its 269,000-metric-ton Warrick Operations smelter in Evansville, Indiana, by the end of the first quarter of 2016. By the end of the second quarter of 2016, the company will reduce alumina production by 1 million metric tons, which includes curtailing the remaining 810,000 metric tons of refining capacity at its Point Comfort operations in Texas. (Point Comfort is part of the Alcoa World Alumina and Chemicals group of companies, owned 60 percent by Alcoa Inc. and 40 percent by Alumina Ltd.)

The rolling mill and power plant at the company’s Warrick Operations will continue to operate, according to Alcoa.

“We recognize how deeply this decision impacts employees, and we are committed to work closely with our employees, unions and community stakeholders to support them through this transition,” Roy Harvey, president of Alcoa’s Global Primary Products, says. “Despite the hard work of employees, these assets are not competitive. We’re confident that these actions are the right ones in face of these challenging market conditions. We are committed to creating a resilient business ready for launch as an independent company in 2016.”

Once these actions as well as those announced in the fourth quarter of 2015 are implemented, Alcoa says it will have curtailed or closed 812,000 metric tons of its smelting capacity and 3.3 million metric tons of its refining capacity since the company announced in March 2015 its review of 500,000 metric tons of smelting capacity and 2.8 million metric tons of refining capacity.

Alcoa forecasts improving supply-demand balances in the alumina and aluminum markets for 2016 and says it is focused on positioning the business for success throughout market cycles.

As a result of this recent announcement, Alcoa says it will record an associated charge in the fourth quarter of 2015 of nearly $120 million after tax, or 9 cents per share, of which nearly 45 percent will be noncash. Additional charges in the first quarter related to these actions will be between $50 million and $60 million after tax, or 4 cents to 5 cents per share, of which almost 80 percent will be noncash, according to the company.

Commercial Metals sees declines in 1Q of fiscal 2016

Irving, Texas-based Commercial Metals Co. (CMC) has announced financial results for its first quarter of fiscal 2016, ended Nov. 30, 2015. Net earnings attributable to CMC for the period were $25.1 million (21 cents per diluted share) on net sales of $1.2 billion. This compares with net earnings of $32.2 million (27 cents per diluted share) on net sales of $1.7 billion for the first quarter of fiscal 2015.

Earnings from continuing operations for 1Q of fiscal 2016 were $25.6 million (22 cents per diluted share) compared with earnings from continuing operations of $34.3 million (29 cents per diluted share) for the first quarter of fiscal 2015.

Adjusted operating profit from continuing operations for the quarter was $56.1 million. This compares with adjusted operating profit from continuing operations of $67 million for the first quarter of fiscal 2015. Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) from continuing operations was $87.7 million for the quarter compared with adjusted EBITDA from continuing operations of $100.1 million with the first quarter of the prior fiscal year.

CMC says its financial position as of Nov. 30, 2015, was strong, with cash and cash equivalents of $637.2 million compared with $485.3 million as of Aug. 31, 2015, and $1.2 billion in total liquidity. CMC also described cash flow from operations as “strong” at $219.6 million.

Its Americas Recycling segment recorded adjusted operating loss of $6.5 million for the first quarter of fiscal 2016 compared with adjusted operating loss of $2 million for the first quarter of fiscal 2015. Ferrous volumes declined 21 percent, and a decrease in average ferrous selling prices outweighed a decline in average ferrous material costs, compressing average ferrous metal margins by 19 percent relative to the corresponding period in fiscal 2015.

Average nonferrous volumes declined 12 percent, and average margins were compressed by 22 percent relative to the corresponding period in fiscal 2015, CMC says.

For more information, visit www. RecyclingToday.com/article/commercial-metals-1q-2016-financial-results.