US aluminum demand seen strong across most segments: Nichols exec

The US aluminum market is expected to see strong demand across most segments and even the long-suffering building and construction sector should pick up this year, according to Tom Brackmann, chairman and president of sheet maker Nichols Aluminum, said Wednesday.

"There's got to be a pent-up demand for housing units," Brackmann said late Tuesday at a press roundtable at the Aluminum Association's spring meeting in Napa, California. The event was made available by teleconference.

He said the US has seen real economic growth and it is only a matter of time before the construction industry comes back. Once there is confidence in the housing market and confidence that people will be able to find jobs and keep them, the market will see some pick up, he said. "I don't know that we are ready to say things are better, but there certainly is, over the future years, hope in the growth in the market."

But Brackmann said the commercial building construction market will take a little longer to recover.

He said sheet shipments in the construction sector were down 5% in 2011 after failing to maintain the demand seen in the beginning of the year. "Shipments were pretty strong, but then fell off in the second half of the year," Brackmann said. "The industry has cautious optimism that it will stick this time."

In the meantime, other end uses for aluminum are gaining strength, including the automotive, aerospace and can sheet markets.

"It's certainly a time of growth," Brackmann said about the aerospace industry, pointing to major carriers Boeing and Airbus's shift to more aluminum parts.

The industry will double the amount of aluminum used in automotives by 2020, Brackmann said, by penetrating aluminum into general applications. "It's heavily into the power train, into the engine components" now, he said. "The big opportunity is in the body sheet, and that's the place where aluminum is expected to grow in the future."

Given the association's goal to strengthening the industry's sustainability, an executive with the group spoke of the need to improve beverage can recycling rates.

The US recycling rate for aluminum beverage cans is currently at 58.1%, the highest it's been in a decade, but recycling programs have taken a hit with economic downturn, said Steve Gardner, vice president of communications for the Aluminum Association.

The association admitted that more needed to be done to inform the public about recycling. Brackmann said he believes that in the construction sector, the percentage of recovery was "well over 90%," because of the knowledge that most everything could be used again.

But there is still more that can be done to educate the public about recycling initiatives, according to the association. "The [recycling] issue is not solved. Every industry would take more, and I don't think the public understands that," Gardner said. However, there is a new energy and enthusiasm around finding a solution to improving recycling, he said.