Growth Markets
May 19, 2026
Novelis plans to reopen Oswego earlier than expected
Written by Stephanie Ritenbaugh
Novelis expects to restart its hot mill in Oswego, N.Y., in the next few weeks.
During the company’s fiscal year 2026 earnings call, Novelis executives said the financial year was “challenged by the disruption caused by the Oswego plant fires” in 2025, but the company has begun cold commissioning the facility.
“We will have coils coming off the mill within the next few weeks, well ahead of our previous guidance of end of June in the fourth quarter,” said Steve Fisher, president and CEO of the Atlanta-based company.
The first fire occurred on Sept. 16. A smaller fire broke out in October. A third blaze happened on Nov. 20. No employees were injured.
In terms of financial impact, Novelis said the combined total free cash flow impact before insurance is estimated at about $1.7 billion, compared with its previous estimate of $1.3 billion to $1.6 billion. The increase reflects higher repair costs and incremental costs to minimize customer disruption, the company said.
Oswego production interruptions caused rolled product shipments to be an estimated 145 kilotonnes lower than expected for the full fiscal year, resulting in an estimated negative impact of $104 million on adjusted EBITDA.
Net sales increased 7% year over year to $18.4 billion in fiscal year 2026, primarily driven by higher average aluminum prices, partially offset by a 5% decrease in rolled product shipments to 3,557 kilotonnes, mainly due to the Oswego fires.
Fiscal 2026 net income fell 98% versus the prior year to $15 million, primarily driven by the Oswego fires, restructuring charges and unrealized derivative losses.
Novelis said it intends to seek recovery of all insured losses, though some recoveries may take time to materialize. “We currently estimate that we will be able to recover approximately 70% to 75% of the estimated cash flow and EBITDA impacts of the fires overall,” Fisher said.
Devinder Ahuja, CFO, noted that insurance costs have increased by about $20 million.
“That’s not something that we cannot absorb,” Ahuja said. “We are resetting a lot of standards, particularly around hot mill safety and fire prevention. Over time, as we do this work and convince our insurers, we expect that we will be able to bring the cost back on track.”
Key customers, like Ford Motor Co., have sought alternative suppliers while the facility has been out.
Asked about customers who have sought other aluminum sources, Fisher said the company remains confident the facility will ramp up quickly, “which will help to support the overall constrained market in North America, both for automotive and beverage packaging, and we’ll do everything we can to assist our customers in making up volume that was lost.”
“We do know inventory levels across the system are quite low, and there will be a need to make up volume second half of this calendar year. We’re in a position to help our customers as much as possible with Oswego coming up.”
Aluminum substitution
Asked about talk of steel being used in place of aluminum in vehicles, Fisher said the company remains “very confident in aluminum growth on vehicles” for lightweighting and performance applications.
“Where we’ve lowered the five-year growth rate that we see in the automotive market from high single digits to now in more in the 3% to 5% is more driven by electric vehicle adoption,” Fisher said. He said the US is pulling back due to several reasons – affordability, infrastructure CAFE standards, or regulatory standards in the US.
“But the overall penetration and growth of aluminum is still there, and we’re very confident in that,” Fisher said. “With that said, with these high fuel prices that we see today, we also are seeing electric vehicles start to ramp back up, too. So. it’s a bit of a dynamic scenario inside of the US.”
