NEW YORK The North American Die Casting Association (Nadca) has submitted formal testimony to the Senate Banking subcommittee on Financial Institutions and Consumer Protection, which is looking into the ownership of metals, particularly aluminum, by warehouses and financial institutions.
"This is an important issue which warrants significant public and regulatory scrutiny," Nadca president Daniel L. Twarog said in a statement. "We applaud the committee for looking into possible market manipulation, which impacts everything from autos to toys to airplanes."
The automotive aluminum die casting content is expected to grow to more than 143 pounds per vehicle in 2020 from 114 pounds per vehicle in 2012, according to Nadca, while global aluminum consumption will increase to nearly 120 million tonnes by 2025 from 58 million tonnes in 2015.
In February, the queue to remove metal from London Metal Exchange warehouses in Detroit reached nearly 400 days, according to LME data. In June, some users reported 16-month wait times for aluminum from order to delivery, according to Nadca.
"Long lead times, supply shortages, outmoded contract terms and illogical pricing contribute to instability in the aluminum market. This drives down manufacturing productivity and encourages customers to seek overseas suppliers," Twarog said.
Concerns over wait times and ongoing issues with the North American special aluminum alloy contract (Nasaac) was a topic of discussion during a May meeting between Nadca and representatives of the LME (amm.com, May 22).
"The association considered withdrawing its support of Nasaac and remains concerned about terms applied to aluminum contracts," Nadca said Jan. 14.