Market views are mixed on whether an estimated 150 million lb/year of scrap recycling capacity to be added at Logan Aluminum is needed to meet overall US recycling demand, or whether it will leave some processors scrambling for business to run their furnaces.

As reported by Platts last week, the ARCO Aluminum/Novelis joint venture Logan Aluminum will build a new recycling center at its Russellville, Kentucky, rolling mill site at a cost of more than $25 million, ARCO announced February 20. This center will require a 70,000-square-foot expansion of Logan's building complex and is expected to be fully operational by January 2008 with a staff of 40 people.

The added recycling capacity will not change Logan's total output, but it will enable the mill to receive and melt its own scrap, consisting of used beverage cans, scrap aluminium siding and scrap from can manufacturing plants. These materials are currently processed elsewhere and are received at Logan in a partially completed form. "The new recycle center will allow Logan to eliminate this two-step process, thus improving production efficiency," the company said.

The expansion, however, is just for ARCO: Novelis will continue to source its raw material from its own facilities. "We have sufficient UBC capacity at our existing recycling facilities" in Oswego, New York; Greensboro, Georgia; and Berea, Kentucky, a Novelis spokesman said.

One can industry source said the additional recycling capacity was probably not in response to a capacity shortfall in the industry. "I don't think the capacity is needed; I think they just want to have more control," he said. Several market players had heard for more than a year that the expansion was coming.

Currently, Logan sources its raw material in the form of molten aluminium, remelt secondary ingot and rolling slab through converters, such as Hunter Douglas, Owl's Head and Scepter Resources, who buy the scrap and toll through their own plants or others, including the nearby Morgantown, Kentucky, plant owned by Aleris.