Norsk Hydro Exec Expects Aluminum Demand Growth Of 2% To 4%

ByBridgeNews Despite sagging consumption levels in the U.S., aluminum demand in the long term should still grow 2% to 4% annually, says Jim Walters, president of Hydro Aluminum Metal Products, NA. Hydro Aluminum officially opened a remelt plant in Henderson, Ky., May 3, and while U.S. demand for aluminum is soft, metal shortages spurred by smelter shutdowns in the Pacific Northwest will help ensure the plant's output is consumed domestically, Walters says. Hydro Aluminum is a division of Norway's Norsk Hydro. Walters says the sharp economic downturn being experienced in the U.S. does not alter the company's long-term outlook on growth for both the economy and aluminum consumption. "You go through these economic cycles, but the fundamentals long-term for aluminum we feel are very good," says Walters. The 90,000-ton-per-year Henderson plant started production in November of last year and should reach full capacity levels by the end of 2001. Production in 2001 should be a little more than 50% of the plant's capacity, says Walters. The plant recycles aluminum scrap into primary billet. Scrap is procured, through tolling agreements with customers, from purchases with customers and from buying scrap on the open market. The curtailments in recent months in the U.S. Pacific Northwest has affected the availability of domestic scrap supplies, notes Walters. But the plant is ensured most of its scrap supplies from the tolling agreements. The market "is definitely changing," says Walters. "The scrap market is becoming a little bit tighter than it had been." Walters also says Norsk Hydro expects to make a decision this summer on building a greenfield project in the U.S. Southwest. The company looked at the option of purchasing a project in that region, but there were no good opportunities. The Southwest plant would represent the company's second step of expansion in the U.S. The third step would be a possible new project or acquisition in the Northeast.