Novelis Q3 earnings call: Key takeaways and what it means for the market

• Total product shipments: Flat at 936,700 metric tons
• Revenue: $1.906 billion, down 32% year-over-year
• Cash flow: Adjusted $570 million
• Capital expenditures: On track to hit $1.8-$1.9 billion for FY2025
• $750 million investment into sustainability, recycling, and capacity expansions through 2030

Aluminum pricing and market conditions

Novelis acknowledged that falling aluminum prices hurt them this quarter, but a stronger product mix helped offset some of the damage. The company is staying disciplined with costs and capital spending while keeping a close eye on global demand trends. They stated on the earnings call, “The market remains dynamic, and while we have near-term challenges, we are positioning Novelis for long-term success.”

The beverage packaging sector remains strong, but automotive aluminum demand is the big story, EVs are driving higher aluminum content per vehicle. Meanwhile, aerospace is recovering, but supply chain issues are holding back full potential.

• North America remains solid despite broader economic concerns
• Europe is weaker, especially in construction and industrial segments
• China is slowing, which impacts demand for rolling capacity

Recycling and sustainability investments

Novelis is doubling down on recycling, which isn’t a surprise given where the market is headed. They confirmed:

• The Greenfield Automotive Recycling Center in Kentucky is progressing
• South Korea is getting a new recycling center to support automotive and production
• $150 million is going into a Brownfield investment in the U.S. to improve rolling capacity

This is where Novelis continues to differentiate itself from other aluminum producers. With more companies pushing for low-carbon aluminum, scrap-based production is where the industry is shifting. Novelis sees this as both a cost advantage and a long-term growth strategy.

“Sustainability is no longer optional, it’s a requirement. We are leading the charge with our investments.”

Bay Minette mega-project: Updates and what’s next

This is the biggest investment in Novelis’ history, a $4.1 billion plant in Bay Minette, Alabama. Originally budgeted at $2.5 billion in May 2022, costs have increased by 64%, but Novelis says they are still committed to bringing this facility online. Siting engineering challenges, specific site requirements and inflation as the reasoning to this substantial increase in costs.

• Capacity: 600,000 metric tons annually for beverage packaging & automotive
• Commissioning: Second half of 2026
• Future expansion: Built with room to double capacity down the line

Despite considerable skepticism, Novelis said on the call that they are still on track for 2026. Even if Novelis meets its revised 2026 commissioning target, full production could still be months or even years away, depending on how smoothly the ramp-up process goes.

Novelis sees this site as its “plant of the future”, integrating automation, digital tracking, and highly efficient scrap processing. “This facility will redefine what a modern aluminum plant looks like in North America.”

Trade and tariffs: Navigating the global landscape

• Novelis is working on trade exemptions for scrap movements between Canada and the U.S.
• The Chinese market is opening back up to aluminum imports, which could impact global supply chains
• They remain confident that any tariff-related issues will be managed efficiently

“We’ve navigated trade complexities before, and we will do so again. We are confident in our ability to obtain necessary exemptions.”

What this means for Novelis and the aluminum industry

For Novelis:

• They’re positioning themselves as the leader in recycled aluminum, which plays into growing sustainability trends.
• Bay Minette will be a game-changer, but cost overruns mean they need flawless execution to make it worthwhile.
• The beverage and EV markets are critical—if demand stays strong, Novelis benefits; if it slows, they could feel the squeeze.
• Cost management is front and center—capital discipline will determine their success over the next few years.

For the aluminum industry:

• Recycling is becoming the defining trend; producers who can efficiently process scrap will dominate.
• North America is still a bright spot, but Europe and China remain question marks.
• Automotive and aerospace are key demand drivers, but supply chain constraints are slowing growth.
• Premium pricing for low-carbon aluminum is here to stay, more companies are willing to pay extra for sustainability.

Novelis is playing the long game, focusing on recycling, sustainability, and high-margin aluminum products. The numbers this quarter weren’t great, but the company is positioning itself to outperform in the future if demand for premium aluminum holds up. Bay Minette is a massive bet, and how well they execute that project will define their success in the years ahead. “We are building for the future. The market will have ups and downs, but our strategy remains strong.”