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 much."
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.