Alcan Raise Aluminum Sheet Prices Yet Again

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Non-ferrous Metals

Various announcements have been made this week regarding Alcan’s Global Aerospace, Transportation and Industry division US$ 0.02/lb price increase for flat rolled products (1000, 3000, 5000 series and 6061 sheet and coil) from 12 August for the North America market. The Reuters article doesn’t mention if the price increase applies just to aerospace or to all flat rolled products but our understanding is contrary to past experience, the aerospace market is in the doldrums but demand for commercial material is on the up as distributors and end-users re-stock. Even Alcan themselves are not expecting the aerospace market to pick up before late 2010.

Suppliers to the market have told us in interviews that some mills in Europe and the US were sold out for September in early July illustrating the renewed strength of demand for flat rolled products. Extrusions are another matter, conversion premiums have picked up a little for September production but demand although better than three months ago, is still only showing modest growth. How robust these rises in order books prove to be remains to be seen. Mills have been slow to push up premiums reflecting their own cautious view of the 3rd and 4th quarters. While we are never keen to see costs increase, for once we can say some modest growth in metals prices would at least support the growing view that the tide has turned and market demand is finally driving prices rather than speculative froth.

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