Novelis Oswego Mill Restart Delay Tightens US Flat-Rolled Aluminum Supply

Aluminum Ingot

Novelis Oswego mill restart remains one of the most important issues in the US aluminum market. The company now plans to restart the hot-rolling mill by the end of the second quarter. A second major fire pushed the restart well beyond the original December 2025 target. As a result, Novelis Oswego mill restart delays are tightening US flat-rolled aluminum supply.

The outage began in September last year and has already had a major volume impact. Novelis said the shutdown will remove 150,000-200,000t of flat-rolled product shipments before the mill returns. That loss is large enough to affect multiple downstream markets. Therefore, Novelis Oswego mill restart timing matters well beyond one facility.

The disruption has already hit quarterly performance. Novelis lost 72,000t in North American sales volumes during October-December because of the fires. Global shipments fell 11pc to 809,000t in the quarter. Meanwhile, the company posted a $160mn loss after previously reporting a profit.

US Flat-Rolled Aluminum Supply Is Relying on Workarounds

US flat-rolled aluminum supply is now relying on a patchwork of internal transfers and outside sourcing. Novelis nearly doubled intersegment sales volumes to 95,000t in the quarter. The company has been moving hot band from other sites to feed Oswego’s cold-rolling and finishing lines. As a result, the business is preserving some downstream activity despite the damaged hot mill.

The company has also been buying hot band from domestic competitors. That effort is helping support US automakers, especially Ford, which is the main customer for Oswego’s automotive aluminum sheet. However, that support has constrained capacity in other end markets. Therefore, the Novelis Oswego mill restart delay is now affecting the broader industry mix.

The financial cost is also severe. Novelis expects the fires to hit free cash flow by $1.3bn-1.6bn before insurance adjustments. That includes repairs, downtime, and customer support costs. Meanwhile, parent company Hindalco already provided a $750mn equity infusion to ease the pressure.

Bay Minette Aluminum Plant Becomes More Important to the Recovery Story

Bay Minette aluminum plant is now becoming more important in Novelis’ recovery plan. The company expects to start its cold-rolling mill there in March. It still plans to commission the full 600,000t/yr facility in the second half of 2026. As a result, Bay Minette may help offset some of the market strain created by Oswego.

The product mix at Bay Minette also matters. Two-thirds of output will go to beverage-can sheet, while most of the rest will serve automotive flat-rolled products. That means the plant will not replace Oswego directly in every segment. However, it will still add valuable rolling capacity to a tight US market.

This leaves the market in a delicate position. Higher regional aluminum prices helped support Novelis revenues, which still rose 2.6pc to $4.2bn in the quarter. But volume losses and repair costs outweighed that benefit. Consequently, Novelis Oswego mill restart remains the key issue for both company earnings and domestic aluminum sheet availability.

The Metalnomist Commentary

This delay matters because Oswego sits in one of the most sensitive parts of the US aluminum chain. Automotive sheet supply was already tight, and the market has been forced into temporary workarounds. Until Oswego returns and Bay Minette ramps smoothly, flat-rolled aluminum availability will likely stay under pressure.

Novelis Reports 3Q Shipment Growth Amid Rising Demand for Aluminum Products

Novelis

Novelis, a leading U.S.-based aluminum roller, reported a 1.3% increase in third-quarter rolled product shipments, driven by growing demand in the beverage can, automotive, and aerospace sectors. The company anticipates further gains as these markets continue to expand.

Quarterly Shipment Performance

During the third quarter, Novelis shipped 945,000 metric tonnes (t) of rolled aluminum products, up from 933,000t in the same quarter of 2022. Regionally, shipments varied:

• North America: Increased to 395,000t from 390,000t.
• Asia: Rose to 159,000t from 155,000t.
• South America: Jumped by 16% to 158,000t.
• Europe: Declined to 233,000t from 252,000t, largely due to operational disruptions at the company’s Sierre, Switzerland, plant caused by flooding in June.

The Sierre facility resumed partial operations in September, but production is expected to remain below full capacity for the remainder of the year.

Expansion and Market Growth Outlook

Despite the European setback, Novelis remains committed to its growth strategy. The company is on track to commission its new rolling and recycling plant in Bay Minette, Alabama, in the second half of 2026. Once operational, the facility will have an annual capacity of 600,000 tonnes, divided as follows:

• 420,000 t/year for beverage can packaging.
• 180,000 t/year for automotive and specialty aluminum production.

Market trends support Novelis' growth expectations:

• Beverage Packaging: Demand is projected to grow at a 4% annual rate due to increased consumer preference for canned beverages.
• Automotive: Demand is forecast to rise at a 6% annual rate, fueled by the growing popularity of trucks and SUVs in North America.

Financial Performance

Despite the rise in shipments, Novelis’ third-quarter profit declined to $129 million, compared to $157 million in the same period last year. The decrease reflects ongoing challenges in European operations and increased operational costs.

Novelis Sees Rebound in 2Q Demand as Beverage Can Shipments Surge Globally

Novelis has reported a significant rebound in demand for its can sheets in the second quarter of 2024, driven by stabilizing end-user demand across the globe. The aluminum rolling giant noted that beverage packaging customers increased their offtake during the quarter ending on June 30, helping to offset a partial slowdown in automotive demand in certain regions.

The company's quarterly flat rolled product shipments rose to 951,000 metric tons, a 8.2% increase from 879,000 metric tons during the same period in 2023. This growth was primarily attributed to the normalization of beverage can demand, which followed a period of inventory reductions leading into the quarter.

Regionally, South America saw the most significant growth, with shipments soaring by 28% to 111,000 metric tons compared to the previous year. North American deliveries increased by 5% to 388,000 metric tons, while European shipments rose by 6.5% to 261,000 metric tons. Asia also saw a modest increase, with shipments up 4% to 159,000 metric tons.

Automotive demand showed mixed results, varying by region. In Europe, automotive shipments declined, while Asia experienced improvements. In the United States, Novelis began operations at its new automotive recycling facility in Guthrie, Kentucky, during the quarter.

Looking ahead, Novelis confirmed that its major projects, including the rolling mill in Bay Minette, Alabama, and the recycling facility in Busan, South Korea, are on track for completion between July-December 2026 and January-June 2025, respectively. Additionally, the company announced the expansion of its used beverage can (UBC) capacity at its Latchford, UK, plant within the quarter.

Despite the growth in shipments, revenue rose slightly to $4.2 billion from $4.1 billion in the prior year, while profits dipped marginally to $150 million from $156 million over the same period.

Ardagh North American Can Shipments Fall as Weather and Contract Resets Weigh

Ardagh

Ardagh North American can shipments fell in the first quarter as winter storms disrupted logistics and contract renewals reduced offtake volumes. The Luxembourg-based packaging group said regional beverage can deliveries declined by 5% from a year earlier.

Ardagh North American can shipments were affected by difficult operating conditions in January and February. Severe weather limited movement of workers, freight and customer deliveries, forcing the company to run shorter production campaigns and serve customers more selectively.

Ardagh North American can shipments are expected to improve later in the year. The company said volumes will be backloaded to the second half as supply-chain constraints ease and aluminum availability improves.

The result highlights a transition year for North American metal packaging. Ardagh expects a small full-year volume decline in 2026 before returning to shipment growth in 2027, when it aims to secure more volume under long-term supply agreements.

Weather Disruption and Contract Renewals Hit First-Quarter Volumes

Winter storms created a visible operational drag across Ardagh’s can and lid businesses. The company estimated that weather-related disruption removed 1-2 percentage points of growth during the quarter.

The disruption affected more than plant operations. It also affected workers reaching facilities, customers receiving products and trucks moving through road networks.

This created a more fragmented production pattern. Instead of running longer and more efficient production campaigns, Ardagh had to operate shorter runs and supply customers on a more as-needed basis.

Contract renewals also reduced first-quarter volumes. Lower offtake commitments under renegotiated agreements weighed on shipments and contributed to the company’s view that 2026 will be a transition year.

However, Ardagh still expects to meet its contractual obligations for the year. That outlook depends partly on better aluminum supply entering the North American market.

New Can Sheet Supply Could Ease Packaging Constraints

Ardagh expects additional aluminum availability to support the North American packaging chain later this year. More overseas aluminum is entering the region, easing some availability constraints.

Domestic supply is also improving. Steel Dynamics’ aluminum rolling mill in Columbus, Mississippi, is ramping up, while Novelis’ new Bay Minette, Alabama, plant is expected to add more beverage can sheet supply.

This matters because beverage can production depends heavily on reliable can sheet and lid stock. Any disruption in rolling capacity, coating, logistics or raw aluminum availability can quickly affect packaging output.

For can makers, the expanding domestic can sheet base should improve supply security. It could also reduce exposure to imported material and support more stable long-term contracting.

For aluminum rollers, the packaging market remains strategically important. Beverage cans offer large-volume demand, recycling advantages and recurring consumption tied to food and beverage markets.

Ardagh’s weaker first-quarter shipments therefore do not signal a structural collapse in can demand. They reflect a mix of weather disruption, contract resets and temporary supply-chain adjustment.

The second half will be more important. If new can sheet supply ramps smoothly and customer volumes recover, Ardagh could stabilise shipments before returning to growth in 2027.

The Metalnomist Commentary

Ardagh’s quarter shows that aluminum packaging is still highly sensitive to logistics, weather and can sheet availability. The ramp-up of new US rolling capacity could become a major stabilising factor for North American beverage can supply.