LOS ANGELES A price hike on aerospace aluminum plate this year appears to have stuck and the market could be in store for further tightening, service center executives and sources said.
An increase in heat-treat aluminum plate "should be indicative of a better market," Michael Goldberg, who until last week was president and chief executive officer at A.M. Castle & Co., told analysts on a recent conference call.
Goldberg said the first successful price hike in aerospace aluminum in years was "fairly well received in the marketplace," and said that the consensus in the plate market was that business would continue to improve throughout the year, with the market expected to tighten further in 2013 and 2014.
The Oak Brook, Ill.-based service center chains aerospace bookings posted a 13-percent rise in the first quarter vs. the fourth quarter of 2011, the company said.
Separately, Gregg J. Mollins, president and chief operating officer of Reliance Steel & Aluminum Co., said recently that the Los Angeles-based service center sees aerospace sheet and plate as "extremely strong, very tight," with lead times out 16 to 18 weeks. Speaking on a quarterly conference call, Mollins estimated the price increase at around 5 percent and said it "definitely will stick."
In some cases, according to service center sources, the March increase came in the form of a 5-percent reduction in the distributor discount on 2000- and 7000-series plate.
A 10-cent-per-pound hike earlier in the first quarter in another heat-treat category, 6061 general engineering plate, has also stuck, although the competitive situation is somewhat different, sources said. Foreign 6061 material is reportedly available from a variety of offshore sourcesincluding South Africa, Austria and Romaniaat discounts of at least 10 percent, or in some cases, at less than $2 per pound for an item that carries a list price from domestic mills of $2.35 to $2.40 per pound, market sources said.