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Aluminum billet upcharge holding

Keywords: Tags  aluminum, extrusion billet, metal, prices, market conditions, Rio Tinto Alcan, Arvida, Michael Cowden


CHICAGO — Aluminum billet upcharge remained unchanged as market players were divided about the strength of the market.

AMM’s 6063 extrusion billet upcharge remains steady at 13 to 13.75 cents per pound.

While some billet producers insisted higher prices characterized the markets, several consumers contended that prices over 14 cents were not representative and likely reflected distressed deals or transactions for niche lengths or diameters.

Some consumers accused producers of trying to talk up the market by using what they considered bogus reasons such as a planned outage last month at Montreal-based Rio Tinto Alcan Inc.’s Arvida smelter in the Saguenay—Lac-Saint-Jean region of Quebec (amm.com, March 6).

"It was planned, so I don’t know how you spin it like some sort of crisis," one billet consumer said. "No, the market is not awash in billet. But it’s not hard-to-get metal."

Several consumers said orders slowed in February and March because of an unusually harsh winter but noted that activity has picked up in April.

"We’ve been able to get out metal on the higher end of the bandwidth," a second consumer said, referring to contracts with flexible volume commitments. "We might have to turn to the spot market if this continues, but we’re not there yet."

End markets including automotive, transportation and construction are strong or improving, a third consumer said. But that’s not unusual for the busier spring months, he said, noting that billet supplies were not as tight as his company had forecast. He was unsure whether that was due to increased imports or to companies losing production days earlier in the year due to bad weather.

Several supplier sources brushed aside talk of the market being less than firm, with some insisting that metal would soon become tight if it wasn’t already.

"We’re full through April and have little spot room left for May," one producer said, pointing to solid demand across almost all end markets.

"Things are heating up because everyone (extruders) is busy," a second supplier said. "People have asked me for metal, but I just don’t have it."


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