AMG Critical Materials recently began production of chrome metal at its new plant in New Castle, Pennsylvania. Argus spoke with Kevin Lawson, president of the company's UK-based subsidiary AMG Chrome, on the expanded operations and trends in the chrome metal market. Edited highlights follow:
What led AMG Critical Materials to open a chrome metal plant in the US?
The key driver for us in the US is the designation of it as a critical material.
We're aimed at onshoring critical materials to the US, because we foresee where the dynamic of the market is going geopolitically, and we have customers who are keen for us to invest into on-shoring and protecting their interests.
What does the timeline look like for ramping up the Pennsylvania plant to full capacity?Netherlands-based AMG Critical Materials last month opened the 6,500 metric tonne (t)/yr capacity aluminothermic chrome metal production facility.
We anticipate being at full capacity in the current site within the next eight weeks.
At the moment, we're running one shift; everybody's new to the process and training. The key is to have control over the process. But more importantly, it's safe, and everybody's trained to a level, and then we will split them into two shifts, and thereafter it will be at capacity.
Are there any noteworthy offtake agreements in place for the plant?
We have many offtake agreements, but we are in deep discussion about a significant long-term offtake agreement now for the UK and US plants, and we believe it's going to require an expansion program or development of the UK and US plants.
So, in terms of where we are now, potentially it could be three, four times what we need in quite short order.
I'd like to keep it in the local area, because it's the industrial heartland and I think we've got a good name in New Castle and trained employees. But I think we're going to have to expand the facility we've got, because of the interest in the US market: a case of if we build it, they will come. Now we've got it, all customers understand the benefit of onshore material availability, but some markets are growing quite quickly, and they're looking to have secure volume on an offtake agreement.
The interest has been quite high. The capacity of 6,500 tonnes, that's where we're running at a four-day week to get to that, and then clearly there's the option of running the other three days to ramp up again. We are looking at that. I'd like to walk before I run, get everybody trained and settled down, so that options are available quite quickly. At the moment, we're sold out in the UK, sold out in the US, which again lends itself to rapidly consider expansion.
How long would it take to potentially triple or quadruple capacity?
Once investment and commercial decisions are made, we could potentially fast-track this to about 18 months.
What industries do you see driving chrome metal demand in 2026?
The aerospace industry has become more selective in terms of their qualities and if they can get a lighter weight alloy, in terms of fuel economy of the jet engines.
The fuel cell industry is a big industry now, serving the data centers, which is a new outlet for chrome, certainly not a traditional base for our market.
Aerospace is growing. But fuel cell is growing somewhat exponentially. It's a massive market in terms of energy independence and being off grid, but aerospace is certainly picking up now. There was a constraint on Boeing's build rates, and that's opening up. Airbus is growing as well, so the whole aerospace market is growing, but it's not growing at the rate that we're seeing the fuel cell market.
Are there any supply chain issues you anticipate that could disrupt aluminothermic chrome production, such as the war between the US and Iran disrupting aluminum supplies?
There's no constraint in terms of volume on aluminum, but the premium has gone up because of some shortages in the market.
So, securing the aluminum is okay. We've got our own aluminum powder plant. So in terms of getting the powder, we're self-sufficient on that, as long as we can secure the grade of aluminum. That seems to be a little tight in the market, but we've got long-term agreements so we're well covered.
What constraints are you hearing from customers in the aerospace market on increasing engine outputs, a significant bottleneck for the industry?
At the moment, we're actually not seeing any real constraints, we've seen the build rates going up.
There's the timing in terms of obviously producing the alloy, then producing the parts and then producing the engine. We're seeing there may be little blips going on in terms of the deliveries of aircraft, in terms of the supply chain of how the materials are being pulled through. Then the build rate is good, and the order book for aerospace is very solid.
