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Long-term aluminum alloy contracts risky: Stena

Keywords: Tags  Aluminum, scrap, Salzburg, Stena Aluminium, Fredrik Petterson, Metal Bulletin, Claire Hack

SALZBURG, Austria — Long-term secondary aluminum contracts are on the wane as prices remain volatile in Europe, according to Fredrik Petterson, managing director of Sweden’s Stena Aluminium AB.

“We put our business at risk if we go into longer-term contracts. From time to time we see that the correlation (with the London Metal Exchange) is good, but then it goes away again,” he told delegates at the recent AMM sister publication Metal Bulletin’s 20th International Recycled Aluminium Conference in Salzburg.

“This creates a very difficult market,” he said. “The next question is whether we have a level playing field. We don’t have the same rules in the E.U., and we don’t have the same rules outside the E.U., either.”

Most companies in Europe are trying to abide by the rules and regulations imposed on them, Petterson said, adding that customers may be inclined to move their business to those companies that are not restricted by such legalities and therefore may be able to offer better prices.

As a result, he continued, companies must focus on adding value for customers, which in Älmhult, Sweden-based Stena’s case, includes selling its waste heat back to them, as well as providing materials-handling services.

“We, as an industry, need to be much stronger. If we don’t have mutual price models, it makes us much weaker,” Petterson added. “We have to address these questions (together). We have to act as a unified industry.”

A version of this article was first published by AMM sister publication Metal Bulletin.

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