Newco Metals seeks OK to build Al casthouse

Indiana-based scrap dealer Newco Metals is applying for a variance that will allow it to build an aluminum casthouse for producing extrusion billet from scrap.

Newco is zoned for heavy industrial land use at the prospective site in Ingalls, Indiana, but the legal language does not currently include provisions for furnaces or re-melting scrap, Newco co-owner and vice president Mike Rasmussen told Argus.

The company is set to appear before the Ingalls Board of Zoning Appeals next week to officially request permission to use the town's land for the project. It is in the process of determining funding.

The "boutique casthouse" will target sales to small extruders that sometimes get "pushed aside" by larger billet producers, Rasmussen said. Large US billet producers include Hydro, Matalco and Ohio Valley Aluminum (OVACO).

The project was originally set to move forward in 2016, but the sudden death of then-Newco chief executive Elwin Kipp Barber disrupted the plans.

Newco has been tolling scrap through third parties to produce billet already for years, but this step would vertically integrate the process, Rasmussen said.

US buying spreads for aluminum extrusion scrap have been widening steadily for the past three years, increasing interest in expanding secondary aluminum billet capacity, including Matalco's announcement of plans for a third US casthouse in Wisconsin earlier this year.

Bare, 6063 extrusion scrap is currently trading at nearly 30¢/lb under the Midwest transaction price, far less expensive to purchase than a spread of 9¢/lb under during the same week three years ago.

Newco said that no painted scrap would be melted, that there would be no waste water discharge and that the company's operations would "come in below the thresholds set by those [EPA] regulations" to allay concerns over potential environmental impacts.