Hydro is stopping the use of cold metal as the base for aluminum products at its plant in Årdal, Norway, while continuing with finished products based on primary production. One of the two casthouses in Årdal will be closed.
“Årdal’s two casthouses that produce sheet ingots and foundry alloys (PFA) are using remelting of cold metal to fill capacity. While we have previously earned money on remelting, we now in practice have to pay in order to fill the capacity of both foundries,” says Olaf Wigstøl, head of Hydro’s wholly owned smelters.
By stopping unprofitable remelting activity in Årdal, the sheet ingot casthouse can handle all liquid metal from the primary production there. It will then no longer be a need to maintain the PFA casting operation. About 60 positions are associated with remelting of cold metal at the metal plant.
Hydro and the unions will continue to work on reducing the negative consequences for the employees affected of the decision. None of the permanent employees will be terminated as a result of the decision, and the positions will be phased out over time, including through natural attrition.
Remelting of cold metal is still profitable when used to take down the super-heat from the metal, but not as a basis to run a foundry. The total cost of purchasing and managing metal for remelting also contributes in reducing profitability.
“The market situation has been difficult and from what we can see today, it will still be challenging for many manufacturers. We must constantly work to make Hydro’s production facilities more robust, and make the market adjustments that can improve and strengthen our facilities,” says Wigstøl.
Hydro will fulfill customer commitments and expects the PFA foundry will be closed during the autumn.