By Andrea Svendsen, Managing Editor.
Editor’s Note: This interview first appeared in April 2017 issue of Light Metal Age, as part of a longer article on the the current status and outlook of the aluminum billet industry in North America. The original article included interviews from executives at Alexin, Hydro, Matalco, Nanshan America, UC Rusal, and Service Center Metals, each of which will appear online over the coming weeks.
Erik Fossum has 21 years of experience in the aluminum industry and at Hydro in commercial roles. Over the last five years, he has headed the Commercial organization within Hydro Primary Metal, where he is responsible for sales of value-added products, such as extrusion ingot, primary foundry alloy, slab, wire rod, and standard ingot.
What is the current status of Hydro’s aluminum billet business? What are the main geographic markets that the company serves? What are the alloys you most commonly sell?
Hydro is currently selling 2.9 million tonnes of value-added products per year on a global basis, of which 1.5 million mt is extrusion ingot. Our main market is Europe, but we have a global presence with sales in the U.S., Asia, Australia, the Middle East, and Turkey/Africa. For extrusion ingot, we sell a wide variety of alloys covering sectors like building and construction, transportation, truck and trailer, and automotive. Focus going forward is toward the transportation and automotive sectors.
How much of the company’s aluminum billet is made from prime versus remelt/recycled material?
Hydro is focused on sustainability and maintaining a low carbon footprint and concentrates on recycling as an important contributor to this. In the U.S., Hydro has a remelter system with two plants and an annual capacity of approximately 190,000 tons. In addition, we serve the U.S. market with primary metal from our joint venture smelter in Qatar. In Europe, our recycling activities are larger, with a total of six plants and a capacity close to 500,000 tpy.
How does Hydro add value to its aluminum billet operations?
Hydro focuses strongly on quality, both in terms of the intrinsic product quality, where we aim to be a leader, and also important service aspects like commercial and technical support and lead-time and OTD. For some of our customers, R&D cooperation is also important.
Has the company implemented any new technology developments recently to improve production efficiency, quality, and specification of the billet produced? Does it plan to make such improvements?
Hydro is constantly improving our quality and the efficiency of our casthouses. Over recent years, we have introduced a new series of recycling friendly extrusion ingot alloys with the same press speed and product capabilities as primary alloys. This has been well received in the marketplace.
How has the manufacture and supply of billet changed over the past decade? What do you predict for the future of the worldwide aluminum billet industry?
Over the last few years, we have seen growth figures for extrusion demand in Europe and the U.S. vary between -2% in Europe in 2013, to plus 8% in the U.S. in 2014. Going forward, we expect a gradual improvement in Europe, with construction activity continuing to improve from low levels. In the U.S., we expect the housing market to sustain the positive momentum, while we foresee some weakness in the U.S. truck and trailer segment.
How stable would you say the North American aluminum billet industry is at the moment? What are the challenges it is currently facing? What are the growth opportunities?
The demand side in North America looks to be growing at a stable rate now. We see the important issue for the U.S. downstream extrusion industry to be having a steady and reliable supply of high quality billet. It will be important for the industry to have good supply lines to ensure the downstream manufacturing having good supply of high quality raw material. The U.S. growth also clearly looks like it will last longer than what has been seen of expansions in history. Part of the explanation for this could be that the growth rates per year, in terms of GDP, have been lower than previous expansion cycles. This could justify the theory that the cycle of growth will be more prolonged, as there is not sufficient pressure in the economy to trigger sharp interest rate increases that would kill off growth.
How much has the growth in the use of aluminum extrusion for automotive impacted the aluminum billet industry?
The growth in the automotive sector is very positive for the aluminum market. Although the majority of the growth is coming within automotive sheet, we also see steady product development towards the automotive sector needing extrusion. This will continue to be a benefit for the long term and will positively affect extrusion demand in the U.S.
Andrea Svendsen has been with Light Metal Age for over ten years. In her role as managing editor of , she addresses all areas of the magazine’s editorial focus. She works with authors, participates in industrial plant tours, performs interviews with industry managers, and writes feature articles to ensure relevant information is featured. Her editorial experience, along with her attention to detail, is critical in the production of the magazine.