Hydro announces new investments to meet growing low-carbon aluminium demands from auto sector

Norwegian aluminium company Norsk Hydro announced a fresh wave of investments on Thursday July 7, expanding the company’s use of post-consumer scrap and focusing on meeting low-carbon aluminium demand from the European automotive industry

The company has begun production at its aluminium recycling plant in Rackwitz, Germany, to produce an additional 25,000 tonnes per year of HyForge, it said.

The investment will increase the use of post-consumer scrap as a major raw material at the plant, which already produces 95,000 tpy of extrusion ingot.

HyForge is Hydro’s range of forged aluminium which is delivered with a certified low-carbon footprint, as per the Hydro REDUXA 4.0 certificate.

The expansion is planned to become operational by the end of the first quarter of 2023 following an estimated €40 million ($40.72 million) investment.

“With more automotive customers putting emphasis on sustainability, we are taking this breakthrough step at Rackwitz to produce aluminium HyForge products, resulting in even smaller diameter billets, while ensuring a best-in-class climate footprint by using a high share of post-consumer scrap in the process,” Eivind Kallevik, executive vice president for Hydro Aluminium Metal, said in a statement.

“The business case shows that it is not only profitable, but it also has an important sustainability dimension, and it brings us closer to reaching our ambitious recycling targets,” he added.

The announcement comes at a time of increased focus on sustainability and a desire by companies such as Hydro to meet the growing demand for low-carbon aluminium production, with European scrap prices rising as a result.

Fastmarkets most recently assessed the price for aluminium scrap floated frag, delivered consumer Europe at €1,580-1,680 per tonne on Friday, July 1, up from €1,420-1,490 per tonne one year earlier, after reaching a peak of €1,920-2,000 per tonne in March 2022.

New ‘green’ automotive extrusion press in Denmark

Hydro will also invest 300 million Norwegian krone ($29.69 million) in a new extrusion press at its plant in Tønder, Denmark.

The 12-inch press will mainly serve the European automotive and electric vehicle (EV) market, adding production capacity and the capability to produce extrusions with larger cross-sections.

“The Tønder plant is an important part of our automotive network, supplying European carmakers with high-end and safety-critical components. We are expecting rapid growth in the automotive industry’s use of extruded aluminium components in the coming years,” said Bruno D’hondt, Hydro’s senior vice president, who leads the European extrusion business unit.

“This is in line with our strategy of lifting profitability and driving sustainability in our automotive business,” he added.

Hydro expects to extrude the first billet from the new press in mid-2024.

The Tønder plant sources low-carbon and recycled aluminium from Hydro and has direct access to Hydro recycled aluminium range ‘Restore’ which is produced at the Sjunnen recycling operation in Sweden.

The entire production process at Tønder, including extrusion and fabrication, is based on renewable hydropower from Sweden, Hydro said.

Fastmarkets last assessed the aluminium low-carbon differential value-added product, Europe at $20-35 per tonne on Friday, July 1, rising from $10-15 per tonne when the differential was first launched in May 2021.

The new press in Tønder will be used to extrude components for EVs and hybrids. At the adjacent fabrication center, the profiles from the 12-inch press will be fabricated to advanced components that meet the strict requirements of automotive customers.

Examples of extruded automotive components include battery frame applications, crash management systems such as bumper beams and crash boxes, as well as side sill inserts, side beams and longitudinal beams.

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