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
USW Local 9700 did not appear
entirely pleased with the new deal, which the unions
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 contracts
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
amm.com, Jan. 4). A union negotiating committee
recommended that the last offer be accepted after suggesting
that members reject a previous offer presented by ABI (
amm.com, 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
Another market observer said he
expected less off-grade materialaluminum with higher iron
contentwould come out of ABI following the deal, meaning
that more P1020 and billet should enter the market from ABI on
a more regular basis.