Post-Recession Outlook Positive for Aluminum, Say Mill Execs

The U.S. aluminum market improved more last year than many had expected and this year may be even better, predicted Steven Demetriou, chairman and chief executive officer of Aleris International Inc., Beachwood, Ohio. Demetriou was part of a press roundtable at the Aluminum Association and Aluminum Extruders Council joint spring meeting in Fort Myers, Fla., in mid-April.

“Overall, it has been an excellent beginning of a recovery,” said Demetriou, current chairman of the Aluminum Association. He expressed some reticence about the questionable pace of growth for the next 12 to 18 months, “but once we get beyond 2011, and housing and some of the other lagging markets get back on track, we could see some pretty interesting years.”

The association board members admitted that some of the gains the aluminum market achieved in 2010, especially during the first three quarters, were due to inventory replenishment across the supply chain. “But going forward, we expect strong demand in most of our markets,” said Jean-Marc Germain, president of Atlanta-based Novelis Inc.’s North American operations and chairman of the Aluminum Association’s executive committee.

Several months of inventory building left service centers with 3.5 months of aluminum stocks on hand by the end of last year, prompting a correction. By late March, they had whittled them back down to 2.5 months of supply, according to Metals Service Center Institute data.

Keeping inventories lean is a common theme at all levels, said Demetriou, which means service centers and producers must become better supply chain managers. “Everyone learned their lesson during the recession and now recognizes that more effort needs to be put on productivity and efficient use of working capital.”