Novelis shipments decline, Bay Minette commissioning advances

Novelis’ shipment mix changed during the first quarter of fiscal 2027 as lower third-party rolled product shipments coincided with higher intersegment volumes, while management provided additional detail on the Bay Minette startup schedule. At the same time, higher aluminum prices, lower scrap costs and cost savings increased earnings and lifted net sales companywide.

The company’s third-party rolled product shipments fell 4.9% to 916,000 metric tons in the April through June quarter from 963,000 metric tons the prior year period, while total rolled product volumes, including intersegment shipments, increased by 2.7% to 1.050 million metric tons.

Even so, net sales increased 22.8% to $5.793 billion, while adjusted EBITDA increased 24% to $516 million. Adjusted EBITDA per tonne ton increased 30.3% to $563 per metric ton from $423 per metric ton in the year earlier period.

North America volumes

North America’s third-party rolled product shipments declined 3.3% year over year to 376,000 metric tons during the fiscal quarter.

Management said lower automotive and specialty end market shipments offset higher beverage packaging shipments. The company also cited lower scrap consumption in the region.

Management briefly attributed part of the regional decline to the continued effects of the Oswego disruption, which also affected product mix. The Oswego hot mill restarted in early June and production is ramping up.

Intersegment shipments increase

Third-party rolled product shipments declined across all four regions during the quarter, led by Asia with a 7.3% decrease and Europe with a 6.9% decline. North America reported a 3.3% decrease, while South America’s third-party shipments fell 2.7%.

At the same time, total shipments increased in Europe, Asia and South America increased 5.0%, 7.9% and 7.1%, respectively, because those operations supplied additional intersegment volumes.

Europe reported 31,000 metric tons of intersegment shipments during the quarter compared with none a year earlier. Asia increased intersegment shipments to 80,000 metric tons from 51,000 metric tons, while South America increased them to 23,000 metric tons from 8,000 metric tons.

Those three regions shipped 75,000 metric tons more intersegment material combined than during the same quarter last year. That increase is equal to about one-fifth of North America’s 376,000 metric tons of third-party rolled product shipments during the quarter.

Novelis specifically said Europe’s higher beverage packaging and automotive shipments and South America’s higher beverage packaging shipments supported North America.

Bay Minette schedule

Management also provided additional detail on the startup schedule for the Bay Minette rolling mill.

The company said commissioning is underway and expects to begin rolling coils during November.

It then plans to complete internal technical qualifications before shipping coils to customers in early calendar 2027. Management said customer qualifications is expected to take about two months, after which the company expects to begin commercial shipments during the first quarter of fiscal 2028, corresponding to the April through June 2027 period.

Steve Fisher, president and chief executive officer, also said the facility is expected to require 18 to 24 months to ramp up to targeted capacity utilization.

During its first fiscal year of commercial sales, Bay Minette will focus primarily on beverage packaging products.

Nicholas Bell

Nicholas brings over half a decade of experience covering metals markets, pricing trends, and supply chain dynamics. Prior to joining AMU, he reported on aluminum, high-temperature scrap, and ferro-alloy markets at Argus Media, with additional coverage of minor metals and rare earths. His work has built deep expertise in North American metals pricing and trade flows. A native of Houston, Nicholas holds a bachelor’s degree in Media Production and an MBA with a concentration in Finance, both from the University of Houston.