NEW YORK Kaiser Aluminum Corp. will not sell billet produced at its Kalamazoo, Mich., facility to any third parties next year as it needs the metal for its own consumption, sources have told AMM.
"Most of the billet theyre casting is for their own internal use, but they have sold small amounts outside," one source told AMM. "Theyve (told customers) next year they wont be able to supply them. They had a new contract internally that they need to fulfill next year. As a result, the production needs to stay internal."
"They told at least one customer, Dont count on us for supply next year," a second source added.
"It was a decision made at a higher level. Their hands were tied," a third source said of Kaiser, adding that he expects the company will sell to third parties again at some point in the future.
Kaiser declined to comment.
According to the Foothill Ranch, Calif.-based producers last earnings report, Kaiser shipped 18.1 million pounds of billet and other industrial products in second-quarter 2012, up 4 percent from 17.4 million pounds in the first quarter of 2012.
The capacity of the casthouse could not be ascertained, but the first source estimated that it produces between 25,000 and 50,000 tonnes (55 million to 110 million pounds) of billet annually.
Kaisers 464,000-square-foot plant in Kalamazoo primarily serves the automotive and general engineering markets.
Two years ago, Kaiser announced plans to expand the Kalamazoo plant to capitalize on growth in automotive markets (amm.com, Oct. 25, 2010), and the company reiterated its bullish forecast for automotive earlier this year on the back of manufacturers moving toward increased use of the lightweight metal (amm.com, July 26).
Aluminum producers optimism for automotive rose this summer after rumors that Ford Motor Co. is planning to build future versions of its F-150 pickup truck with a predominantly aluminum body, which would reduce the weight of the vehicle by more than 700 pounds (amm.com, July 27).