NEW YORK Demand for
aluminum billet remains strong, and although market
participants report more material entering the United States,
supply is still tight and premiums remain at record-high
The range for spot aluminum
billet premiums has widened to 12 to 13 cents per pound from 12
to 12.75 cents previously, with one producer getting 13.5 cents
this week for an uncharacteristic load.
"Right now, were trying to
assess how much more our customers want and see if we can
supply them or not," one producer source told AMM.
"Our customers are still very optimistic for the upcoming
"Its the same story here,"
a second producer source told AMM. "Contracts are
maxing out our production capacity, leaving little (room) for
"I sell more than Ive
got," a third producer source said.
Domestic extruders have been in
full ramp-up mode. AACOA Inc., a Niles, Mich.-based extruder,
recently bumped up its production to a 24/7 schedule
(AMM, May 2), while nearby Lippert Extrusions, a
division of Goshen, Ind.-based Lippert Components Inc., is
bringing its three presses to full nameplate capacity of 50
million pounds per year to meet rising demand (see related
story, page 8).
Although sources expect more
material to hit U.S. shores in upcoming monthsBaar,
Switzerland-based Glencore International Plc plans to move some
20,000 tonnes of billet to the United States in the next few
months (AMM, April 30)supply is still at the
forefront of attention among North American consumers and
"That would be a lot (of
billet)," a trader said of Glencore. However, if the Swiss
trading house sells that billet to the spot market throughout
the rest of the year, its not very likely to affect
premiums, he added.
offshore) billet wont have a significant impact on the
big-picture supply issues," a fourth producer source said. "The
market is strengthening, and supply is tight. Its squeaky
"If the market appears to be a
little less red-hot, its just because there are more
units available," the first producer source said.
North American supply concerns
have built over the first four months of the year as
speculation continues to mount that Oslo, Norway-based Norsk
Hydro ASA will permanently shutter its Kurri Kurri smelter in
New South Wales, Australia (AMM, March 29).
A March 29 fire at Alcoa
Inc.s Massena West facility that halted billet production
has added fuel to supply concerns (AMM, April 5).
Although Massena West primarily produces forged billet for its
own internal consumption, it also supplies other industries,
leaving participants convinced that it will have a negative
impact on North American markets.