Ford (NYSE: F) faces months of supply disruption after a three-alarm fire shut the hot mill at Novelis’s Oswego plant, an asset that supplies about 40% of the aluminum sheet used by the US auto industry and a major source for Ford’s F-150.
Novelis says “a major portion” of Oswego is offline until early next year, removing core hot-mill capacity for auto-grade sheet. Industry analysts peg Novelis’s annual automotive sheet output at over 350,000 metric tons.
Ford shares fell on the disruption headlines, closing Tuesday’s session down over 6% before resuming the fall Wednesday. The company said it uses “several aluminum suppliers in addition to Novelis” and has “a full team…dedicated to addressing the situation and exploring all possible alternatives to minimize any potential disruptions.”
Ford moved the F-150’s exterior from steel to aluminum a decade ago, magnifying exposure to any bottleneck in automotive sheet.
Atlanta-based Novelis is shifting some supply from rolling plants in Europe, Brazil, and South Korea and coordinating with competitors to backfill US demand. The company is currently subject to a 50% tariff on imported aluminum, raising cost and logistics hurdles as it reroutes supply.
A new rolling mill in Alabama is still under construction, while a Kentucky partnership largely serves beverage-can sheet and cannot fully offset auto demand.
Other automakers drawing Novelis aluminum include Toyota, Hyundai, Volkswagen, and Stellantis. Toyota said it is working with alternate suppliers and is “in pretty good shape, but not completely out of the woods.” Stellantis said it is working to mitigate impacts. Hyundai reported no immediate production hit.
The blaze on September 16 collapsed part of the plant’s roof and required 26 area fire departments and about 175 firefighters to extinguish. The Oswego County fire coordinators office says the cause remains under investigation.
Information for this story was found via The Wall Street Journal and the sources mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
