Press Metal inks multi-year low-carbon aluminum supply deal with Novelis Korea

Southeast Asia's largest integrated aluminum producer Press Metal will enter into a multi-year low-carbon aluminum supply contract with leading aluminum rolling and recycling firm Novelis on March 4, according to a release seen by Platts, part of S&P Global Commodity Insights.

Under the contract, Press Metal will supply Novelis Korea Limited with its recently launched low-carbon aluminum product series branded as GEM, produced in Malaysia.

This supply contract will be in force for three years beginning in 2025, with an aluminum supply volume of 24,000 mt/year, according to sources familiar with the negotiations.

The GEM line of low-carbon aluminum products includes P1020 and primary foundry alloy (PFA) ingots as well as billets and wire rods.

"Press Metal is proud to partner with Novelis, the leader in low-carbon flat-rolled aluminum products and the world's largest aluminum recycler," said group CEO Tan Sri Paul Koon.

President of Novelis Asia Sachin Satpute said, "the partnership with Press Metal will help Novelis meet our ambitious carbon reduction targets and provide our customers with the most sustainable aluminum products."

Press Metal's primary aluminum smelters in the Mukah and Samalaju regions of Sarawak, Malaysia, have a total nameplate capacity of 1.08 million mt/year and predominantly operate on renewable hydropower, making them widely known for their low-carbon aluminum metal.

The low-carbon aluminum metal produced by Press Metal has less than 4 mt of CO2 emissions per metric ton of metal output for Scope 1 and 2 emissions, in line with Platts specifications for low-carbon aluminum premium assessments in Asia, Europe and the US.

A sample of Press Metal's low-carbon aluminum certificate provided to Commodity Insights featured cradle-to-gate carbon footprint certifications by third-party experts.

Novelis is headquartered in Atlanta, Georgia, USA, and is a subsidiary of Hindalco Industries, which is part of the Indian conglomerate Aditya Birla Group.

Novelis' Yeongju plant in South Korea is the largest aluminum recycling center in Asia, with an annual capacity of 320,000 tons.

The facility produces flat-rolled aluminum products for the construction, packaging, beverage can and consumer electronics markets.

Growing low-carbon aluminum interest in Asia

Market participants expect Asia's demand for low-carbon material to rise amid industry-wide efforts to reduce and account for carbon emissions from the aluminum value chain.

Talks of Asian buyers seeking specific volumes of low-carbon aluminum for 2025 from the automotive and packaging sectors continue to pick up pace, although market participants' willingness to pay a premium varies depending on region, volume and whether their customers are able to pass on costs.

On a global scale, Asian low-carbon spot premiums have surpassed their equivalents observed in the European and American markets, largely due to relatively fewer supply options within Asia and demand from value-added processing facilities in Asia that can re-export intermediate products to the West.

The main producers of low-carbon primary aluminum located within the Asia Pacific region include Malaysia, New Zealand, Russia and Indonesia, though certifications and merchantability of different brands vary, according to market participants.

Platts launched daily low-carbon aluminum premium assessments for Japan and Asia and corresponding all-in calculations based on underlying spot and quarterly contract prices, effective Jan. 2, following market feedback of growing interest in low-carbon aluminum pricing in the region.

The Japan Low-Carbon Aluminum Premium (Japan-LCAP) and Asia Low-Carbon Aluminum Premium (Asia-LCAP) assessments reflect the spot premium or discount over standard P1020A aluminum for low-carbon aluminum with total certified direct and indirect emissions associated with aluminum smelting, typically considered by market participants as Scope 1 and 2 emissions of 4-mt equivalent (mte) or less of CO2 per ton of aluminum.

Japan-LCAP caters to material delivered to Japanese main ports, while Asia-LCAP represents cargoes delivered to the rest of Asia, with Incheon, South Korea as the basis port.

Platts assessed the Japan-LCAP and Asia-LCAP at $45/mt and $48/mt, up from $30/mt and $20/mt from the beginning of 2025, respectively, on March 3.