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Aluminum distributors report surpluses

Keywords: Tags  Service centers, Kaiser Aluminum, Jack Hockema, lead times, aerospace, 2000, 7000, 6000 Suzy Waite


NEW YORK — Aluminum service centers are reporting a surplus of certain products, with lead times for some alloys as short as two-and-a-half months.

Lead times for non-aerospace 2000- and 7000-series plate are between 10 and 12 weeks, sources said, while lead times for 6000-series plate are around 11 weeks.

One service center source told AMM that "2000 and 7000 non-aero plate is out there and 6061 plate is quite plentiful, too. There seems to be a lot of material out there. Some distributors are sending out surplus lists. That tells you that (mills) aren’t moving product as fast as they thought they were and things are slow."

Service center sources also said that material is in surplus at mills and with traders.

"You can get 6000 in 10 to 12 weeks or less," a second service center source said. "There’s plenty of 6000 supply. Mills are calling asking if we need 6000 plate."

Lead times for aerospace 2000- and 7000- series alloys are unchanged at between three and five months, in slightly from six months seen earlier this year, and service centers maintain that those without contracts will have to wait to get the material.

"It’s a tight market (for aerospace 2000- and 7000- series). If you don’t have a contract you’re in trouble," the second service center source said.

"If you’re buying 2000- and 7000-series aerospace (without a contract) it’s still subject to inquiry," the first service center source said.

Service centers are keen to keep stock levels low in light of the looming fiscal cliff, although those polled by AMM believe President Obama and Congress will find a solution.

Kaiser Aluminum Corp. chairman, president and chief executive officer Jack Hockema told AMM last week he was confident that lean inventories could help service centers weather the storm even if no resolution comes by year-end and the United States. enters a recession (amm.com, Nov. 21).

Until the fiscal cliff picture becomes clear, it is hard to gauge what demand will look like next year, although for the moment, sources expect it to be reasonably level.

"Demand next year will be fairly flat. I think the U.S. economy will keep (chugging) along, doing its thing," the second service center source said. "There’s a lot of cautiousness out there."

"I just don’t know how to gauge (2013) right now. I’d say modest growth," the first service center source said.


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