NEW YORK Beck Aluminum Alloys Ltd. has shut one of two furnaces at its Racine, Wis., plant due to unfavorable margins and a continued tightness in scrap, a company source said.
Scrap is too tight and its not cost effective to produce at these levels, the source said. Ingot prices need to rise if the scrap issues continue. Its too difficult trying to sell 356.1 when you can buy primary A356 for a penny or two more per pound.
The closed furnace has the capacity to produce about 120,000 pounds per day. The closure reduces Becks output by about 3 million to 4 million pounds per month from a monthly total of 8 million to 10 million pounds previously, the source said.
The Racine plant will continue to operate a single furnace until spreads improve, the source said.
Other major alloy producers, including Birmingham, Ala.-based Bermco Aluminum, are also said to be planning temporary furnace outages.
A Bermco source confirmed one furnace outage. We are not going to take an order that we know we are going to lose money on. ... It should be said, however, that with the shutdown of one our furnaces, we still have the capacity to meet all of our contractual obligations, the source told AMM.
Were having a really hard time getting scrap in, the Beck source said. It seems like a lot of people are holding material. At first we thought it was weather related, but problems seem to be persisting.