Home > News > China

Spectro Alloys curtails secondary aluminium alloy capacity by 30%

Thursday, Apr 12, 2007
点击:59

Minnesota-based Spectro Alloys is reducing its capacity at its smelter by about 30% in an effort to improve margins.

"In 2006, our industry experienced good volumes and margins," it said in a statement. "Due to the US automotive slowdown, 2007 started with lower volumes and tighter margins. Reducing our capacity allows us to better manage margins on ingot sales and scrap purchases."

Both of Spectro's furnaces will continue to run but at a reduced capacity, said Gary Borner, vice president of sales. "We will manage our inventory levels to meet customer demand."

Spectro added that the upside of tight markets is the opportunities they provide to consolidate the industry. We remain open to acquiring other aluminium businesses." However, no further information was revealed. Producers have said consolidation in the secondary market is highly likely to reduce some excess capacity.

Arkansas Aluminium Alloys said Monday it was raising its A380 secondary aluminium alloy list price to $1.10/lb, delivered Midwest, due to increasing scrap and transportation costs. Producers said that diesel fuel costs are up 40 cents since December.

Industry major Wabash Alloys' list price on A380 has remained at $1.10 since March 30 when it was raised 2 cents.

Most deals on A380 were done around the $1.06-1.08 level on Monday, with two producers reporting sales at $1.09. Said a producer, "There's a major push to get higher numbers." Another suspected that ingot prices will rise again following increases in London Metal Exchange NASAAC prices. "We should soon see $1.08-1.09," he said.

A third producer said the smelters are dedicated to moving prices up after he felt some diecasters were ready to accept the higher numbers. "The major smelters are squeezed on their margins," he said. Said another producer: "Unless we see a downturn in the cost of scrap, which we do not expect, we will resist any downward movement in ingot prices."

However, slow ingot demand may be capping prices for now. A producer said the "pressure is on for higher prices, but we're not getting it. There's still a lot out there under the market. The $1.08-1.10s are great numbers, but we cannot sell at them."

Producers admitted that their volumes were soft to start off the second quarter. Producers and diecasters agreed that volumes were down 10-20%, although one diecaster said that was off from elevated 2006 levels. A non-Midwest producer said his business has been "very slow, with volumes off for April by 25%." His March volumes were off by 20%.

Recommended exhibitions

16TH ARAB INTERNATIONAL ALUMINIUM CONFERENCE
  ARABAL, which is being organized and hosted by Qatalum, is the premier trade event for the Middle East's aluminium i......
Aluminium 2012
  ALUMINIUM is the leading B2B platform in the world for the aluminium industry and its main applications. This is whe......
The 4th edition of Zak Aluminum Extrusions Expo
 Date

  14th - 16th December 2012

  Venue

  Pragati Maidan,

  New Delhi,India.

  Exhibition Timings

 ......
ALUMINIUM DUBAI 2011
Name:ALUMINIUM DUBAI 2011
Time:2011-5-9 to 2011-5-11
Place:Dubai International Convention & Exhibition Centre, Dubai, UAE......