Service Center Metals to grow Al extrusion output

Virginia-based aluminum extruder Service Center Metals will spend $102mn to expand extrusion and remelt capacity in Prince George County, citing increased demand.

SCM will benefit from a $350,000 Commonwealth Opportunity Fund grant in addition to a performance-based grant of $900,000 meant to encourage spending by companies already based in the state of Virginia. Virginia competed with Tennessee for the project, according to the Virginia Economic Development Partnership.

One of the country's largest integrated extruders, Service Center Metals makes its own billets from recycled scrap which it then turns into finished extrusions, rods, shapes and tubes. It focuses on selling its metal to service centers rather than end consumers directly. The company operates a 30-acre campus in Virginia with twin plants each for billet production and extrusion.

US demand for extruded aluminum products like those found in window and door frames has been on the rise over the past few years and even throughout pandemic-impacted 2020. But non-residential building and construction began to come under pressure late last year and in early 2021, said SCM competitor Bonnell Aluminum in its latest earnings.

The extrusion sector has benefited from high aluminum prices on the sales side over the past year, but has also been squeezed by historically high raw material prices. In August, SCM competitor Aluminum Shapes filed for chapter 11 bankruptcy. Shapes posted a $19.4mn loss for its 2020 fiscal year on sales of $13.6mn, citing overseas competition, Covid-19-related shutdowns and "skyrocketing" metal prices.

Argus assessments for 6063 extrusion billet premiums and bare 6063 extrusion scrap prices are trading at 24.5¢/lb and $1.485/lb, respectively, near their highest levels since the data began in 2010. The Argus weekly Midwest premium for primary aluminum is trading at its highest level since the series began in 2001.

By John Betz