Metals

Levitated Metals starts construction on aluminum recovery plant

Levitated Metals, a new company founded by President Ronak Shah, held a groundbreaking ceremony Jan. 15 to mark the start of construction of its heavy media flotation plant in New Caney, Texas, in the East Montgomery County Industrial Park about 35 miles northeast of Houston.

Shah most recently worked with Alter Trading Corp., St. Louis, as vice president of strategy and technology, a position he held for roughly six years. Prior to that, he was Alter’s senior director of operations strategy. Shah also worked for Portland, Oregon-based Schnitzer Steel Industries as director of continuous improvement.

He says he has been planning Levitated’s heavy media plant, which represents an investment of nearly $10 million, since May of last year. “It’s taken a lot of work to get where we are now.”

The company will source zorba from auto shredder operators in the South, separating the aluminum from the copper, brass, zinc, magnesium, stainless steel and other metals using an advanced flotation process. Shah says the plant will produce 10 million pounds per month when operating at full scale.

“Zorba will be our primary feedstock and what the business model is primarily driven on,” Shah says, adding that the company also will purchase zorba fines and zurik within a 500-mile radius of the plant.

“Recycled aluminum is a key step in the automotive supply chain,” he says. “The aluminum block engine of an end-of-life 2007 Ford Taurus has a very similar chemistry to that of a 2020 Chevrolet Silverado. Customers reduce waste, save energy costs and are more efficient purchasing clean aluminum feedstock from Levitated Metals instead of other substitutes.”

Shah says the company’s 10-acre facility will begin production operations in September. The recovered metal packages of twitch (aluminum) and zebra (a mixture of brass, copper, zinc, nonmagnetic stainless steel and copper wire) will be marketed to smelters and processors in the U.S., Mexico and overseas, the company says.

“Texas, the Southeast United States and northern Mexico are home to dozens of melt operations,” Shah says. “Levitated Metals is excited to be a valued supplier to them. My belief is that a large portion of aluminum will go to Mexico and the vibrant and large casting industry in the northern part of that country. I am also excited to sell into the Southeast U.S., which is home to a large number of smelters.

“Some aluminum and a large portion of the heavies will absolutely go overseas,” he continues.

Levitated does not yet have supply agreements in place but is in the early stages of establishing supply and consumer relationships, Shah says.

The company opted for heavy media separation over X-ray or sensor-based sorting, he says, because the process can make a very clean aluminum casting product by extracting more of the magnesium.

Shah says he selected the greater Houston area for the plant because of its proximity to supply and demand, its busy container port and strong manufacturing workforce. Interstate Highway 10, I-45 and I-69 are main thoroughfares for aluminum shipments into the Southeast U.S. Additionally, he says, Levitated is hoping to take advantage of backhaul opportunities into Mexico.

The company will be hiring for marketing and operations positions in the first quarter, Shah says.

Nucor reports slimmer Q4 profits

Charlotte, North Carolina-based Nucor Corp. has announced consolidated net earnings of nearly $108 million in the fourth quarter of 2019 and an annual net earnings figure of $1.27 billion. That compares with net earnings of $275 million in the fourth quarter of 2018 and what was a record $2.36 billion in net earnings for all of 2018.

Leon Topalian, Nucor president and CEO, describes the numbers as “higher actual fourth-quarter earnings than we indicated in our mid-December quantitative guidance.” The CEO points to “stronger than expected steel mill segment performance in December [as] the primary driver” for the final results.

“We believe that the inventory destocking that occurred throughout most of 2019 concluded in the fourth quarter, when customers resumed more normal buying patterns,” Topalian adds in remarks accompanying the results.

The scrap-fed electric arc furnace (EAF) steelmaker says it paid less for ferrous scrap infeed on average in both the fourth quarter and all of 2019 compared with 2018. “The average scrap and scrap substitute cost per gross ton used in the fourth quarter of 2019 was $275, an 8 percent decrease compared to $299 in the third quarter of 2019 and a decrease of 23 percent compared to $359 in the fourth quarter of 2018,” the steelmaker writes. “The average scrap and scrap substitute cost per gross ton used for the full year 2019 was $314, a decrease of 13 percent from $361 for the full year 2018.”

Positive factors Topalian cites include “general business conditions [that] improved in the fourth quarter due to a number of factors, including a rate cut by the Federal Reserve, the new labor agreement between the United Automobile Workers and GM and definitive progress on the trade front.” In looking ahead to 2020, Topalian comments, “We are encouraged by recent economic trends and confident that our positive momentum will continue in 2020.”

The company does not mention its David J. Joseph Co. scrap recycling subsidiary in remarks about its raw materials operations, noting instead that losses in the division “significantly increased in the fourth quarter of 2019” because of the “impact of our Louisiana DRI (direct reduced iron) plant’s planned outage, which was completed in mid-November.”

Nucor also took a write-off or impairment charge “related to one of our fields of proved producing natural gas well assets” and points to “further margin compression throughout our raw materials businesses” as a factor in the fourth quarter.

Steel Dynamics has profitable 2019 but not at 2018’s pace

Fort Wayne, Indiana-based Steel Dynamics Inc. (SDI) has reported net sales of $10.5 billion and net income of $671 million in 2019, recording a profitable year but not at the record-shattering level of 2018.

The electric arc furnace (EAF) steelmaker says it shipped out 10.8 million tons of steel in 2019 and calls its operating income of $987 million and net income of $671 million SDI’s “third-best performance” in company history.

In a news release accompanying its annual and fourth-quarter results, SDI says its lower earnings in the fourth quarter of 2019 resulted in part “from two planned annual maintenance outages” at the company’s Butler, Indiana, and Columbus, Indiana, flat-roll divisions.

The company cites low ferrous scrap prices in the fourth quarter of 2019 and throughout the year as being pertinent to its steelmaking costs and its recycling division’s performance.

“Ferrous scrap prices declined in eight of the past 12 months during 2019, resulting in our metals recycling operations earning $28 million in 2019 compared to $88 million [in 2018],” comments Mark D. Millett, president and CEO of SDI. The company’s metal recycling operations includes the OmniSource network of scrap processing and brokerage locations.

“Even though 2019 was one of our best years, it was challenged with high customer steel inventories, as many customers purchased beyond normal demand levels in 2018,” Millett says. “Domestic steel demand remained steady in 2019, but as customers began to destock inventories, steel prices declined throughout the year.”

Regarding 2020, he comments, “Looking ahead, steel customer inventory levels have moderated, and underlying domestic steel demand remains intact for the primary steel consuming sectors, including automotive and construction. Customers have been positive concerning the business outlook for 2020.”