NEW YORK The London Metal Exchange has agreed to a meeting between its aluminum committee and the North American Die Casting Association (Nadca) in response to the die casting groups call for immediate changes to the exchanges North American special aluminum alloy contract (Nasaac), Nadcas president told AMM
The meeting, scheduled for the week of May 20, is intended to give the LME and Nadca an opportunity to discuss the contracts effectiveness after Nadca said in an April 25 letter that it would encourage all die casters to discontinue support of the Nasaac for pricing finished aluminum parts within the industry unless changes to the contract are made immediately (amm.com, April 30
My expectation for the meeting is to hear from the LME how they are going to fix the issues with Nasaac and the time frame they have for implementation, Daniel L. Twarog, Nadcas president, told AMM
May 8. If we come away with promises and no firm strategy and timeline, then we hold little hope that the issues will be corrected in a timely manner.
Nadca, which claims to represent more than 95 percent of all North American die casters, has alleged that many producers of 380 aluminum alloy will no longer sell to consumers on a Nasaac basis, material purchased on Nasaac isnt deliverable within the stated LME contract period and consumers cant acquire physical Nasaac material from the LME-listed warehouses in less than nine months from the time of order.
Nadca also alleged that the market is perceived as being manipulated by the trading, financial and warehouse industries given financial ownership of LME warehouse facilities.
We are aware of market comment, an LME representative told AMM
in an e-mail May 8 in response to Nadcas allegations. The warehouse system is under constant review and we will communicate our responses when it is appropriate to do so.
The LME declined to confirm news of the meeting or comment further.
Die caster sources said they are hopeful that the matter can be resolved.
I hope we can, at a minimum, get the Nasaac cash price to reflect an official premium that will be accepted in pricing formulas with automotive and nonautomotive customers, a source at a major die casting company told AMM
, adding that he would like to see Nasaac metal be made available for purchase on a timely basis at the price traded on the exchange, plus reasonable warehousing, interest and delivery costs, with no additional premium.
The LMEs aluminum committee consists of Gavin Prentice (formerly of Marex Spectron), Martin Abbott (LME), Gary Borner (Spectro Alloys Corp.), Tristan Busch (Trafigura Beheer BV), Holger Ellmann (MRI Trading AG), Steve Hodgson (Rusal Marketing GmbH), Nick Madden (Novelis Inc.), Jean Marchand (Rio Tinto Alcan), Nicholas Martin (Norsk Hydro ASA), Michael Parker (Alcoa Inc.), Frans Pettinga (Koch Metals Trading Ltd.), Yang Xiao Wu (China Aluminium International Trading Co. Ltd), Wolfgang Zwingenberger (Audley Capital Advisors LLP) and Marcos Castro (LME).