SDI to Build $2.2 Billion Aluminum Flat-Rolled Operation

Commercial production is expected to begin in the first quarter of 2025, the company said.

SDI said it would own more than 94% of the rolling mill facility through a joint venture agreement with Unity Aluminum Inc. The Fort Wayne, Ind.-based steelmaker said it would contribute extensive construction experience and that Unity would provide aluminum operating experience.

Recall that Steel Dynamics has undertaken and completed a major construction project with its $2 billion flat-rolled EAF sheet mill in Sinton, Texas – the newest of its kind in the US.

SDI said an aluminum mill it is a natural fit and complementary extension to its metal recycling platform. The facility will serve SDI’s customer base of notable consumers and processors of aluminum flat-rolled products, which are under-supplied by an estimated 2 million tons annually, the company said.

“We are incredibly excited to announce this meaningful growth opportunity, which is aligned with our existing business and operational expertise,” said Mark Millett, SDI’s chairman, president, and CEO. “Today we are announcing our plans to broaden our ability to serve our existing and new customers by adding high-quality, low-carbon flat-rolled aluminum to our product portfolio. We are also excited to further diversify our end markets with plans to supply the sustainable beverage can industry.”

The rolling mill is expected to have the capacity to supply roughly half of its recycled aluminum slab requirements onsite, with the remaining amount to be provided by the construction of two additional satellite recycled aluminum slab centers, one in the southwestern US and the other in Mexico. Those facilities are expected to cost $350 million.

The US operation is expected to start by the end of 2025 and the Mexican one to begin operations in 2024. SDI will own 100% of those “satellite” facilities.

The aluminum rolling mill will require roughly 900,000 metric tons of aluminum slab supply and 225,000 metric tons of primary aluminum supply annually at full capacity, the company said.

SDI estimates the project will generate between $650 million and $700 million of annual EBITDA (earnings before interest, taxes, depreciation, and amortization) on a through-cycle basis.

Millett added that SDI’s successful history in carbon flat-rolled steel positions them “exceptionally well to execute this strategic opportunity in an adjacent metal space, and to deliver strong long-term value creation.”

By David Schollaert, David@SteelMarketUpdate.com