NEW YORK Aluminum billet
producers this week reported an uptick in calls from
consumers seeking metal.
s spot billet premiums remain in a range of
11 to 13 cents per pound on sales of about 2,500 tonnes of
"Calls are coming in now. It was
light (last week), but now bookings are coming in. Id say
weve got three or four spot quotes out there that
well probably get," one producer told AMM.
"Im starting to get calls
this week for people looking for metal," a second producer
said. "Most of the extruders Ive talked to have had good
bookings and are comfortable with where business is."
Demand from end markets is seen
as robust, but several sources attributed the rise in inquiries
to the ongoing concerns over Alcoa Inc.s Aluminerie de
Becancour (ABI) smelter in Quebec.
Since September, Alcoa and the
United Steelworkers union have been trying to renew a labor
contract covering some 900 workers at the
400,000-tonne-per-year smelter, leaving some nervous that
billet supply will diminish if negotiations turn sour and
workers strike or are locked out (amm.com, Jan.
"Some of the spot business we
did (this week) are normally ABI customers," the first producer
said. "Its not enormous quantities, so I wouldnt
call it panic buying. I think theyre just hedging their
As talks continue in Quebec with
no signs of a resolution, producers and consumers are taking a
closer look at their inventories.
"I wouldnt say the ABI
situation is keeping me awake at night, but February is looking
stronger. We may need to reshuffle our portfolio," a third
One ABI customer told
AMM he hasnt had to go to the spot market yet,
as he loaded up on extra inventory late last year. But this
could change if Pittsburgh-based Alcoa and the USW fail to come
to a resolution soon.
"We got a bit ahead of that
game. Weve carried more inventory since December and are
fine through February. If talks still arent settled,
well have to decide what to do going forward," the
consumer said. "If something does happen, it will make it
tough. November is one thing, but going into spring and summer?
It will not be good."
Still, while most agree that a
lockout or strike at ABI would make North American billet even
more scarce this year, others say its not as
"If there is a lockout or a
strike, Im sure theyll get people running the
facility," the second producer said. "Plus we dont know
how much metal theyre sitting on up there."
Imports from the Middle East
could also offset any tightness for a couple of months,
although a fourth producer said its risky for North
American consumers to rely on this metal, which is typically
bound for China.