Reliance Steel & Aluminum Co. expects its toll processing
operations to benefit from strong 2014 growth in the automotive
sector, company executives said.
The Los Angeles-based
service centers toll processors in the United States and
Mexico are forecasting better volumes in 2014 than last year,
Reliance president and chief operating officer Gregg J. Mollins
said in an earnings conference call with analysts Feb. 20.
returns from toll processing operations "are awesome," Mollins
said. Thats especially the case for automotive aluminum,
where there is less competition than on the steel side of the
business and thus delivers better profit margins, he said.
As a result, Reliance
is spending "well over" $10 million to expand and take
advantage of opportunities in automotive aluminum as more
carmakers convert from high-strength steel to the light metal,
Mollins said. The money is going toward, among other things,
"revolutionary" laser and blanking equipment for light-gauge
aluminum for auto body sheet, he said.
"We think that the
auto industry is going to be very strong in 2014," Mollins
said, brushing aside concerns that increasing dealer
inventories could lead to automakers scaling back
The aluminum supply
chain is ramping up to meet expected increases in demand from
the automotive industry as mass-produced vehicles, including
popular pickup trucks, convert from steel- to
aluminum-intensive vehicles (
amm.com, Feb. 19).