Dr. Markus Schober, Managing Director, Hammerer Aluminium Industries GmbH. Future challenges for wrought alloy production from scrap

Dr. Markus Schober, Managing Director, Hammerer Aluminium Industries GmbH Future challenges for wrought alloy production from scrap

Agenda Introduction of Hammerer Aluminium Industries Market Conditions & Customer Requirements Critical Business Processes Pro s & Con s of Available Remelting Technologies Realization at Hammerer Aluminium Industries

Location Ranshofen & Santana

Facts & Figures HAI Group 2011 Group Turnover: Employees: Exports: 326 Mio. 645 (540 AT/ 105 RO) 71% - Key Market: Mid-/Eastern-Europe Certification: ISO/TS 16949 Sales Casting: Sales Extrusion: Turnover Processing: 135.000 t 40.000 t 15 Mio.

Business Units HAI casting Ranshofen HAI casting Santana HAI extrusion HAI processing Sales: 110 Mio. Capacity: 70.000 t/a Employees: 75 Products: billets & slabs 2xxx 7xxx Sales: 76 Mio. Capacity: 85.000 t/a Employees: 105 Products: billets & slabs 5xxx & 6xxx Sales: 157 Mio. Capacity: 45.000 t/a Employees: 320 Products: profiles 3xxx 7xxx Sales: 15 Mio. Employees: 80 Products: components

All collected scrap is recycled today Quality? Aluminium Recycling Industry Primary development due to financing deals squeeze the industry margins More scrap will be upgraded to higher value added products More scrap is controlled through closed loops (tolling business) Environmental aspects for aluminium recycling are more important Recycling certificates, End of Waste (EoW), IPPC, Will lead to stronger competition for available scrap!

Customer Requirements Aluminium industry promotes End-of-Life recycling of products Recycling content ratio for wrought alloy products Use of recycled material (from post-consumed scrap) Marketing campaigns on products with recycled content of > 90% Motivation for products with high recycled content will end up in too high demand for scrap!

Increasing demand in alloy specification Tolerance of chemical composition Trace elements Customer Requirements Flexibility to cover the entire wrought alloy spectrum (2xxx 7xxx) Requests in material properties (microstructure) Remelters have to adopt to changing market conditions and customer requirements to be successful!

Critical Business Processes Customer requirements quality, service, cost, time Highest possible metal yield/recovery 1% less means 15 /t loss (LME = 1.500 /t) Low energy consumption Environmental compliance Highest health & safety level Low operational costs

Critical Business Processes Scrap sampling Scrap storing Scrap treatment Remelting Alloying / Refining Shipping to customer Homogenization US-testing & Sawing Casting

Input Material Shredder Thermal break, painted or clean profiles Offset/litho sheets Dross Primary

Availability of different types of scrap Type of material Size and thickness Organics Alloying composition (mixed or internal scrap?) The right choice of technology Potential of various remelting technologies Targeted capacity Product portfolio (alloy changes) Investment & production costs Remelting

Two Chamber Furnace (Traditional) + Short reaction time, low metal loss & energy costs, scrap mix, safe charging - High investment costs, sump (continuous operation), - 25% Primary needed for reasonable productivity

Two Chamber Furnace (Optimized) + Short reaction time, low metal loss & energy costs, scrap mix, safe charging + Less primary needed for full production - High investment costs, sump (continuous operation),

Dry-hearth Furnace with electromagnetic stirrer + Flexibility, low investment costs, lower energy consumption (reg. burner) + No primary needed, easy to operate - Limited scrap input (org. < 1%), productivity

Rotary Tilting Furnace + Flexibility (i.e. tolling business), good metal yield, low energy consumption + Variety of scrap (high contamination) - Limited furnace capacity, salt slag disposal

The Material costs have huge impact on profitability! Scrap sourcing from external & internal market Good scrap purchasing management ensures: Competitive average purchase costs Good & broad supplier structure Variation of scrap depending on product portfolio Risk management regarding LME fluctuation (hedging)! Management system to control and develop the core business Scrap Purchasing

Scrap Management Communication between scrap purchasing and scrap management Professional incoming inspection of scrap Sorting & treatment of incoming material (if needed) Storage of scrap under the roof (safety issue) Production planning to optimize material costs

Scrap Inspection Check and classification of each delivery Chemical composition Metal yield Amount of contamination Defined sorting areas for suspicious material Feedback to scrap supplier Separate storage of scrap and booking into the system

Scrap Treatment Shredder unit Scrap crushing and removing of free iron and other non-metallic parts Cutting machine Cutting long scrap to suitable size for the charging process

HAI Remelting Equipment 1 Two Chamber Furnace with EMP (65 t - traditional design) Contaminated & painted scrap, chips, master alloys 2 Two Chamber Furnaces with EMP (80 t - optimized design) Contaminated & painted scrap, chips, master alloys 1 Dry-hearth Furnace with electromagnetic stirrer (55 t) Clean & internal scrap, granules 1 Rotary Tilting Furnace (15 t) Dross, low grade scrap, chips, shredder Tolling business

Use the chemical limits Alloying conditions (launder, EMP, stirrer) Substitute master alloys where possible Degassing units for quality standards (ALPUR, SNIF, STAS) Use of Ceramic Foam Filter (CFF) Casting technology (Wagstaff Air-slip) Homogenization parameters Training of employees Alloying, Casting & Homogenization

Costs & lack of raw material squeeze wrought alloy production Cost pressure will lead to further consolidation Develop niche strategies to be successful Focus & develop YOUR core processes! Conclusion Hammerer Aluminium Industries strives to: Deliver HAI-Quality Products Offer HAI-Flexibility & Services With this scope of products & services HAI has become one of the well-known suppliers of recycled and remelted wrought alloys in Europe!

Thank you for your attention!