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Producers continue to find ways to gain market share

Dec 21, 2016 | 04:31 PM | Fastmarkets AMM staff

Tags  aluminum, producers, alcoa, kaiser, breakthroughs, technology, automotive, aerospace

Whether meeting the needs of automotive, aerospace, construction or other markets, new technologies and applications continue to emerge.

Getting new and improved products into the marketplace is a key area for aluminum producers. Whether meeting the needs of automotive, aerospace, construction or other markets, new technologies and applications allow manufacturers to better service end-users and capture additional market share.

“We will continue to improve the performance of our businesses. And we have been making Alcoa more agile,” said Klaus Kleinfeld, who served as chairman and chief executive officer of Alcoa, the parent company, and now holds that position for Arconic, Inc., in an earnings call. “We saw the profits up at Arconic; we saw upstream performing even lower to the low-pricing environment. We will continue to be laser-beam focused on all these things that we can control like productivity, like monetizing non-essential assets, focus on cash, strengthening our balance sheet, drive profitable growth, also using innovation for us.”

Alcoa has always been a leader in aerospace innovation, he added, explaining that more than 90 percent of all aerospace alloys that are in service were invented by Alcoa.

“And we are always charging ahead on the next point here. And in that light, we have shown that we’re today leading in additive manufacturing in aerospace,” Kleinfeld said. “We opened in July our metal powder plant. The metal powder plant is geared towards titanium, nickel and aluminum alloys, powder alloys optimized for the 3D printing and for aerospace components. We are advancing the feedstock as well as the processes, as well as the product design, as well as the qualification. That’s the beauty of being in this industry for such a long time and understanding what is required to make things.”

Jack Hockema, CEO and chairman, Kaiser Aluminum Corp., pointed to capital improvements his company has made to improve production, which is another strategy producers often use.

“So, in 2017, we’ll continue to get benefits from the tail of the investments that we already put in the (inprovements) and the new casting complex. We’re still continuing to reap the benefits this year and expect to continue to reap benefits next year,” Hockema said. “So, if the markets go where we think the markets go and with our position in the marketplace, we frankly think we will utilize some of that incremental capacity as well, so we’ll get leverage benefits on margin as well as cost benefits as well as some increased shipments. And in terms of the return, we expect very attractive returns compared to our cost of capital on this $150 million program that we’ve announced.”

Another recent example of a company venturing into this territory is Sapa, which has developed the first-ever automotive aluminum brake line using a high-strength aluminum alloy.


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