LONDON Excess capacity is
likely to act as a major restraint on the market for 6061
aluminum plate in 2013, according to a number of service
centers active in the market.
An expected surge in demand for
aerospace-grade plate2000- and 7000-series
alloysled to significant capacity increases over the past
few years, but with demand for the material slower to take off
than anticipated, mills have switched production to 6061,
Right now, there is plenty of
6061 plate inventory in the United States, one service center
source told AMM. "It seems that all of the plate mills
in the world during the last aerospace cycle doubled their
capacity, and I dont think aerospace demanded it. There
is a lot of 6061 plate in the U.S. now, and were
certainly not expecting any shortage."
Major aerospace mills ramped up
production to meet expected demand as airlines started to
replace older fleets and respond to an increasing number of air
travelers. But inventory hangover from the slump of 2008,
coupled with delays in such blue-ribbon programs as Boeing
Co.s 787 Dreamliner and Airbus SAS A380, helped
temper the expected boom in demand.
In response, mills have turned
that excess capacity toward 6000-series alloys, further
pressuring a market already struggling to cope with rising
"Theres 6061 showing up in
some of the mills depots, which indicates theres a
glut of 6061 available," a second service center source said.
"Its not that demand is down. Its that more
qualified producers in the world are all pointing their guns to
the U.S. Theres a lot of 6061 out there."
Few expect the aerospace market
to provide significant relief in 2013, which in turn is likely
to be bad news for the 6061 market.
"It all correlates back to
waiting for the boom cycle in the aerospace world to correspond
with the boom cycle in automotive, which would place
constraints on 6061 as a result," the second service center
"In 2010, we were talking about
(the aerospace boom) happening in 2012 or 2013, but right now
the threshold point is moving further and further out. We think
it wont happen in 2013, but in 2014. The backlogs are
there, but there have been production constraints related to
technology," he added.
Even if aerospace does perform
better than expected in 2013 and the three largest domestic
producers of aerospace alloysAlcoa Inc., Constellium Inc.
and Kaiser Aluminum Corp.all shift production to 2000-
and 7000-series aerospace alloys, imports likely would offset
any tightness that could theoretically occur in the 6061
"Eventually there will be a
pinch on domestic production of 6061, but there will be plenty
of import metal," a third service center source said.
A fourth service center source
agreed. "Mills with limited capacity that can make 2000-,
4000-, 6000- and 7000-alloys will always go where the money is.
(Its) capitalism at its best. If 6000-series alloys start
to get tight and prices rise, then you can bet (global) mills
will increase production," he said. "Santa ... has all the
aluminum we could ever want in his bag of goodies."