International Inc.s top executive remains optimistic
about aluminum demand in the building and construction,
aerospace and automotive sectors despite drawing red ink in the
products demand is expected to grow 6 percent every year
through 2017, Aleris chairman and chief executive officer
Steven J. Demetriou said during a conference call following the
release of the companys earnings results.
"We continue to remain
encouraged by the long-term growth opportunities for our
businesses and the industries they serve," he said.
strength-to-weight characteristics should benefit Aleris as
end-users in diverse industries look to boost sustainability
with lighter-weight products, Demetriou said. In addition, the
fundamentals of the automotive and aircraft industries remain
strong despite a temporary inventory overhang in the aerospace
inventory overhang results from production delays for certain
aircraft models, Demetriou said. But Boeing Co., Chicago, and
Toulouse, France-based Airbus SAS, had "near level" backlogs of
nearly 10,000 planes in June, a figure that continues to grow,
percent of those planes are "metallic" in content rather than
composites, which means long backlogs should translate into
higher aluminum demand in the future even if aerospace volumes
are likely to remain flat to down in the third and fourth
quarters, he said.
On the automotive
front, Aleris has been "very encouraged" by growing demand for
auto body sheet, especially with North American light vehicle
build rates expected to jump 5 percent in 2013, Demetriou said.
Also bolstering results in the sector are gains in trailer
builds, he added.
construction volumes in North America should be stable in the
third quarter, Demetriou said. The normal seasonal ramp up in
building activity over the summer months was hampered by bad
weather and customer destocking, but assuming the construction
cycle has been delayed, Aleris expects demand from the sector
to begin to increase soon, he said.
Another tailwind is
Aleris wide-coating facility in Ashville, Ohio, according
to Demetriou. The Ashville operation experienced "production
bottlenecks" in the second quarter but should be running at
planned levels in the third quarter, he added.