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ABI workers accept 5-year labor deal

Keywords: Tags  Aluminerie de Bécancour, ABI, USW Local 9700, Clément Masse, Alcoa, labor negotiations, contract ratification, aluminum Michael Cowden

CHICAGO — United Steelworkers union members at Alcoa Inc.’s majority-owned Aluminerie de Bécancour Inc. (ABI) have voted to accept a new five-year labor agreement at the Québec smelter, the union and the company said Feb. 22.

The move brings to a close months of negotiations that had some market sources worried about a potential supply disruption at the 400,000-tonne-per-year smelter during the spring, a historically strong time for demand.

Alcoa applauded the result. "ABI is pleased to have reached an agreement with the union, which is positive for our employees, partners, customers and the community," a spokeswoman for the Pittsburgh-based aluminum company told AMM in an e-mail.

The contract runs until Nov. 22, 2017, and replaces a previous contract that expired on Nov. 22, 2012, Alcoa said in a release Feb. 22.

Of 944 workers represented by USW Local 9700, about 62.5 percent, or approximately 590, voted in favor of the contract, according to calculations by AMM based on information provided by the USW. Of the 765 members who did vote, 77.1 percent voted to adopt the new deal.

USW Local 9700 did not appear entirely pleased with the new deal, which the union’s president characterized as "inevitable."

"This is not an ideal scenario. Our members were ready to continue the battle ... (but) we believed that a conflict would not have achieved a better contract," USW Local 9700 president Clément Masse said in a statement.

Among the contract’s benefits are a wage increase of 13 percent over five years as well as improvements to health insurance benefits and a pension scheme for retirees under 65, the USW said. The deal also calls for possible changes at ABI that could see productivity gains of 8 percent, the union said.

Alcoa and the USW have been trying to reach a new labor agreement at ABI since September (, Jan. 4). A union negotiating committee recommended that the last offer be accepted after suggesting that members reject a previous offer presented by ABI (, Feb. 19).

Some market sources had expressed concern that a potential strike or lockout could squeeze aluminum supplies and lead to higher prices. But others countered that it would have been unusual for the two sides not to reach an agreement after months of talks.

One trader said some customers had been increasing orders in recent months in advance of a potential supply disruption at ABI. Because a strike has been averted, there could be limited downward pressure on premiums, although any price impact might not be felt immediately, he said.

Another market observer said he expected less off-grade material—aluminum with higher iron content—would come out of ABI following the deal, meaning that more P1020 and billet should enter the market from ABI on a more regular basis.

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