Kaiser Aluminum CEO Bullish on Auto Sales, Demand Forecast

by on

Speaking at the Aluminum Association’s Aluminum Week here in Chicago this morning, Kaiser Aluminum’s CEO Jack Hockema rolled out a case for future aluminum demand that we’ve been hearing for a while now.

During his general session presentation, Hockema detailed the automotive demand outlook for the next 10-12 years or so, about which he appeared pretty optimistic.

Citing IHS statistics, Hockema showed that North American auto sales are forecast to climb back to 2005 levels by 2016-17, closer to 20 million vehicle sales for the year. ” I think [20 million vehicles sold] is a relatively conservative outlook,” he said.

Hockema also asserted that US government regulation is a key driver of auto-grade aluminum demand, simply because CAFE standards are consistently pushing automakers to “lightweight” their vehicles.

North American auto sales (and even aerospace sales, which Hockema detailed as well) notwithstanding, there is still the issue of aluminum oversupply. Nowhere is this more poignant right now than in Europe.

The Financial Times reported that Orkla and Hydro, two of Norway’s largest companies, are merging their aluminum operations to create the world’s biggest aluminum extruder, primarily supplying the construction and automotive industries.

“But the 50-50 joint venture will start life at a highly challenging time in the broader aluminium industry, with job losses and plant closures likely in Europe. Capacity on the continent is currently more than 50 per cent higher than demand,” writes Richard Milne in the FT.

exact aluminum prices - MetalMiner IndXDisregarding the global economic situation for aluminum, not to mention the pushback from the steel industry as a supplier to the auto industry, North American producers such as Kaiser keep seeing a sunny upside.

“We love auto, we love aerospace, we see a great future,” Hockema said.

 

Comments (2)

Leave a Comment

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.