CHICAGO Revved-up demand from the automotive sector will likely bolster die casting production in the fourth quarter, most manufacturers said at the North American Die Casting Associations Die Casting Congress in Louisville, Ky.
The positive outlook comes as producers continue to grapple with increased demand for lightweight auto components and ongoing concerns with the London Metal Exchanges North American special aluminum alloy contract (Nasaac) (amm.com, May 22).
While some balked at the difficulties presented by manufacturing lightweight components, most called lightweighting beneficial to the industry.
"Lightweighting is extremely positive for our sector as it is spurring a ton of new designs and has, thus far, generated a lot of work for the industry," one die caster source told AMM, adding that those who dont participate in manufacturing lightweight components could miss a majority of future automotive business. "Everything is getting lighter and people have to start to understand this whole thing is by no means going away."
Others said that until problems with Nasaac are resolved, robust automotive demand will continue to be countered by sagging margins and delays in delivery of metal from warehouses. "All of our problems would be solved if we could just get this metal out of the warehouse," a second die caster source said. "We will continue to put pressure on the London Metal Exchange until the contract becomes a viable tool."
Storage fees remain unreasonably high despite a perception of increased government oversight, according to a third die caster source. "The fees and interest paid on this metal is ridiculous," he said, adding that he would rather not participate in the contract altogether. "The purchase price needs to reflect the contract price; otherwise its a losing proposition. Its that simple."
Despite ongoing concerns about the viability of Nasaac, most die casters noted that increased demand from the auto sector continues to be a boon for the industry. "We really didnt expect things to be as strong as they are going into the fourth quarter," a fourth die caster source said. "Hopefully, it will carry into 2014."