Aerospace overhang emerging: Kaiser

Feb 20, 2013 | 05:36 PM |

Tags  Kaiser Aluminum, Jack Hockema, automotive, aerospace, acquisitions, aluminum, inventory overhang, Boeing Dreamliner Michael Cowden

CHICAGO — Kaiser Aluminum Corp. has seen an inventory overhang develop across a host of products consumed by the aerospace sector, despite robust backlogs for products such as commercial airframes.

The excess inventory has hit "across the spectrum," Kaiser chairman, president and chief executive officer Jack Hockema said, including not only aerospace extrusions but also drawn tubes, cold-finished bar and even sheet. Plate appears to be the only product not to have been hit by the supply overhang.

But Hockema said during an earnings conference call that he expects the inventory situation to adjust in the next few months and not drag on quarter after quarter, as a plate overhang did several years ago. In fact, the backlog in aircraft demand should continue into the next decade, he said, brushing off concerns about the grounding of Boeing Co.’s 787 Dreamliner (amm.com, Jan. 22). Commercial airframe build rates should continue to grow by double-digit percentages in 2013 before slowing....