Aluminum Prices Fall
Just as one aluminum company is trying to convince buyers that prices should rise due to tightening supply, another producer tells its workers that many are about to lose their jobs because of collapsed demand and a third says further cutback are possible.
Aluminum common alloy sheet, grade 3003, slipped back 10¢ to $1.38/lb this month because of weak demand, even though aluminum ingot increased 5¢ in the Midwest market. However, Novelis of Atlanta has announced a premium on prices for some sheet products offered through its Web sales program as a result of a spike in demand from its customers caused by low inventory levels within aluminum distribution industry. American Metals Market says service center destocking over the past six months has sparked a recent increase in demand for Web sales. "We've seen a spike in demand for products that we have available in stock because people haven't wanted to carry inventory," a company spokesman says.
On the other hand, Ormet is poised to further curtail operations at its 260,000 metric ton/year smelter in Hannibal, Ohio. Despite a lack of confirmation from the company, union and market sources say a shutdown to 20% of capacity is planned for Hannibal this summer. The smelter already is down to operating 77% of its potlines in an economicallydepressed region of southeastern Ohio.
The Aluminum Association reports that producer shipments during the first half of 2009 totaled an estimated 7.912 billion pounds, 26.7% below the 2008 six-month total of 10.790 million. And, while analysts suggest there has been a pickup in orders in North America in recent weeks, its 2% six-month rate of growth pales versus the 17% improvement in global bookings.
Meanwhile, Century Aluminum reported a third consecutive quarterly loss last week and slashed production to combat weak demand for aluminum amid a more than 65% drop in sales. "The demand outlook has improved somewhat in certain regions and sectors," CEO Logan Kruger says in a statement. "However, we remain convinced the industry must take additional supply side actions for a global balance to be achieved."
Since the economic downturn late last year, metal demand and prices have plummeted and Century has cut production capacity at its Ravenswood, W.Va., and Hawesville, Ky., aluminum smelters. Kruger now says that "despite recently improving metal prices, we believe the balance of risk remains on the downside."
Aluminum common alloy sheet, grade 3003, slipped back 10¢ to $1.38/lb this month because of weak demand, even though aluminum ingot increased 5¢ in the Midwest market. However, Novelis of Atlanta has announced a premium on prices for some sheet products offered through its Web sales program as a result of a spike in demand from its customers caused by low inventory levels within aluminum distribution industry. American Metals Market says service center destocking over the past six months has sparked a recent increase in demand for Web sales. "We've seen a spike in demand for products that we have available in stock because people haven't wanted to carry inventory," a company spokesman says.
On the other hand, Ormet is poised to further curtail operations at its 260,000 metric ton/year smelter in Hannibal, Ohio. Despite a lack of confirmation from the company, union and market sources say a shutdown to 20% of capacity is planned for Hannibal this summer. The smelter already is down to operating 77% of its potlines in an economicallydepressed region of southeastern Ohio.
The Aluminum Association reports that producer shipments during the first half of 2009 totaled an estimated 7.912 billion pounds, 26.7% below the 2008 six-month total of 10.790 million. And, while analysts suggest there has been a pickup in orders in North America in recent weeks, its 2% six-month rate of growth pales versus the 17% improvement in global bookings.
Meanwhile, Century Aluminum reported a third consecutive quarterly loss last week and slashed production to combat weak demand for aluminum amid a more than 65% drop in sales. "The demand outlook has improved somewhat in certain regions and sectors," CEO Logan Kruger says in a statement. "However, we remain convinced the industry must take additional supply side actions for a global balance to be achieved."
Since the economic downturn late last year, metal demand and prices have plummeted and Century has cut production capacity at its Ravenswood, W.Va., and Hawesville, Ky., aluminum smelters. Kruger now says that "despite recently improving metal prices, we believe the balance of risk remains on the downside."
quoted from: Purchasing.com
