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 of chicken."
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 pricing.
"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.