NEW YORK Aluminum billet
spot premiums remain at multimonth highs as a number of North
American suppliers report being all but sold out.
Spot premiums stayed between 12
to 13 cents per pound this weeka high reported last week
for the first time since Augustwith producers reporting
daily phone calls from consumers seeking additional metal that
they say does not exist.
"Were busy with daily
calls from contracted and non-contracted extruders looking for
additional pounds, which we dont have available," one
producer told AMM.
A second billet producer agreed
the market was tight. "We havent done much spot. Some of
our regular customers are coming for more beyond their
contract, and its our preference to do business with them
(before spot). For them, there is a little capacity, but not
A third producer confirmed that
demand from consumers in the tractor-trailer, automotive,
distribution, and now building and construction industries
appears to be on the rise, contributing to the supply
constraints. "I think everyone is tapped out. Supply is maxed
out," he said.
In addition to roaring demand,
premiums have remained firm at recent highs due to mounting
supply concerns, and were further escalated earlier this month
following a fire at Alcoa Inc.s Massena West casthouse in
upstate New York, which forced the Pittsburgh-based producer to
halt billet production (AMM, April 2).
While the majority of the billet
produced at Massena West is used by Alcoas forged wheel
division, sources said the casthouse also produced some billet
for other markets, meaning its shutdown will have a marked
impact on an already tight market.
"Two (of Massenas)
customers came to us last week after the fire, asking if we
could step in," the second producer said, adding that his
company was still evaluating whether it had the capacity to
accept the new orders.
No timeline has been made as for
when Alcoa will resume normal billet production at Massena
West, a spokeswoman said.
Also fueling North American
supply concerns are Rio Tinto Alcans planned 10-day
outage at its Arvida smelter in Quebec, which began April 10
and is on schedule, AMM understands.