little red ink isnt getting in the way of Constellium
NVs plans to push further into value-added aluminum
products and its optimism about the long-term prospects for
aluminum in the aerospace and automotive sectors.
The aluminum company
posted a 2-million ($2.7-million) net loss (
amm.com, June 17) for the three months ended
March 31, but the results would have been better if they were
adjusted to reflect constant metal prices and foreign exchange
rates, Constellium chief financial officer Didier Fontaine
During the quarter,
the average cash aluminum price on the London Metal Exchange
dropped to $1,912.78 per tonne in March, down 6.1 percent from
an average of $2,037.20 in January. In May, that average
declined further to $1,830.26 per tonne.
during a conference call that Constellium had also been hurt by
weaker demand for soft alloys in the building and construction
sector, as well as lower can stock sales in Europe. Decreased
can stock volumes resulted from bad weather in Europe in the
first quarter, he said.
In addition, demand
from the transportation industry was "subdued" by continued
weak market conditions in Europe and pricing pressure in Asia,
On a more positive
note, Constelliums facility in Ravenswood, W.Va.,
"continued to make progress" in 2013 after making a "turnaround
to profitability" in 2012, he said.
And while soft alloy
demand for extrusions has slowed, that has been "largely
offset" by increased activity in Constelliums hard alloy
business, Fontaine said, adding that "slow growth" into the
automotive sector is also bolstering results as new programs
headwinds, Constellium is upbeat about 2013 and continues to
see "attractive growth prospects" in its key end markets:
aerospace, automotive and packaging, according to chief
executive officer Pierre Vareille.
Vareille pointed to
the Schiphol-Rijk, Netharlands-based aluminum producers
multiyear contract with Toulouse, France-based Airbus SAS (
amm.com, March 28), which not only gave the
company a good idea of what its future aerospace sales would be
but also indicated its success into moving the business "toward
higher-end products," he noted.
On the aerospace
front, Vareille conceded that the company had observed some
"short-term" inventory issues. "But this is more than offset by
gains in market share," he said, noting that the company
expects stable growth in aerospace supported by long-term
contracts and an eight-year order backlog.
In the automotive
sector, Constellium has seen "significant growth" because of
material substitution favoring aluminum, he said.
In the packaging
sector, meanwhile, the company should see "healthy growth" in
Europe as aluminum cans replace glass and steel containers,
However, he warned
that can sales could be hurt if poor weather in Europe
continues to drag on results in the second and third