Aluminum pricing system needs fix: execs

Jun 21, 2013 | 02:49 PM | Michael Cowden

Tags  aluminum, Tom Horter, Alexin, Matt Aboud, pricing mechanism, Hydro Aluminum Metals USA, Lloyd O’Carroll, Davenport & Co. Sapa Extrusions North America

NEW YORK – Aluminum producers need to come up with a better pricing system as remelt suppliers of billet and other aluminum products face a tight scrap market and tighter scrap spreads that eat into profits, according to industry executives.

Unlike the steel industry, almost the entire aluminum supply chain lacks an appropriate mechanism to account for scrap cost trends that can be published in a way that is transparent and that different sectors of the extrusion chain can understand, Tom Horter, president and chief executive officer of Bluffton, Ind.-based Alexin LLC, said at AMM’s Aluminum Summit in New York.

"These (pricing mechanisms) need to be tied to a trusted press source who can independently go out into the marketplace—and this can even be regional—and publish on a periodic basis what the scrap discount numbers are doing relative to some index," Horter said. "The industry then needs to use this data transparently ... to understand the pricing challenge and adjust premiums on a regular basis" to account for scrap margin pressures encountered by producers.....

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