NEW YORK General Motors
Co. is believed to be standing its ground in using the London
Metal Exchanges North American special aluminum alloy
contract (Nasaac) for its 2013 contracts, while other consumers
are reported to have locked in contracts without Nasaac.
Many contracts have been booked
for 2013 using free-market pricing from publications such as
AMM, typically at a 2-cent discount to the published
A380.1 price, market sources told AMM.
However, one die caster who
currently supplies GM as part of a multiyear contract said that
he had met with the automaker in November and was unable to
convince it to opt out of using Nasaac. "If you had a contract,
theyre just going to enforce it," he said.
However, he added that if new
contract business were offered to him by GM, he would insist on
using free-market pricing.
One secondary aluminum alloy
producer told AMM that his company would meet with GM
this week, noting that business had already been booked with
GM-supplying die casters using free-market pricing.
Any further delay in finalizing
contracts could force GM to rely more heavily on the spot
market in 2013, a second alloy producer warned.
"GM could find themselves in a
situation where they spend the whole year scrambling for metal
every month," he said. "Theyre playing a dangerous game
The second alloy producer argued
that "minus-2-(cent)" deals may now be more difficult to come
by if GM decided to accept contracts which use free-market
"I think theyd be looking
at minus 1 cent if they came into that market now," he said,
adding that his company had previously offered contracts to
consumers incorporating Nasaac with a 2-cent "collar" from
published free-market pricing.
However, these offers
werent accepted, he said.
Detroit-based GM refused to
comment on the discussions.