We are currently forecasting an average cash London Metal Exchange (LME) price for aluminium in 2001 of $1,500 a tonne or 68 cents a pound. That compares with a 2000 average of around $1,548 a tonne (70.2 cents a pound) and a 1999 average of $1,362 a tonne (61.78 cents a pound). There are three main reasons for our caution about 2001.

The first is that we are seeing a fairly hard landing for the U.S. economy in 2001. This coincides with economic slowdowns in Europe and Asia. So aluminum consumption, in our opinion, is likely to fall by at least 1 to 2 percent in 2001, which equates, on a global basis, to a loss of between 250,000 to 500,000 tonnes.

The second reason for our caution is that primary production should rise by around 800,000 tonnes a year in 2001. This increase, the biggest increase since 1992, is from a combination of greenfield and brownfield expansions. That increase combined with the drop in consumption will more than cancel out the loss of production in the Pacific Northwest.

The Pacific Northwest is bullish, in our view, on a longer-term basis. We have lost more than 500,000 tonnes a year of production in the Pacific Northwest already. And the lower aluminum prices stay, particularly from October 2001 onwards, the more certain we can be that we will see more production cuts in the Pacific Northwest. This is particularly so if electricity prices remain at or above $50 a MWH.


These cuts are certainly not bearish! They will help to underpin aluminum prices. But unless consumption growth is really taking off, which requires a strong U.S. economy with robust growth again in the transport and construction sectors, the cuts in themselves are not enough, in our opinion, to send aluminum prices soaring.

Aluminum industry depends on auto industry

The aluminum industry is crucially dependent on the automotive industry for its growth. Unit aluminum consumption in cars has been showing an annual growth rate of around 6 percent a year and has shown no signs of slowing down.

Nor has the volume of car sales. General Motors said last year that it expects worldwide vehicle volumes to grow from 50 million in 1998 to 65 million vehicles by 2008.

The automotive industry wants both stable and low prices. The more volatile aluminum prices are, the less the automotive industry wants to use aluminum in its long-term model plans. A model platform is usually for six to seven years.

Total primary aluminum usage at present in cars is around 30 to 40 percent of the total aluminum used, depending on which region you are in. But primary usage is now growing much more rapidly in the form of sheet and extrusions. This is particularly true for the fast growing sports and utility vehicle section of the market.

That has to be good news for more primary aluminum being consumed as well as secondary. The gains in average unit use in kilos per car are absolutely breathtaking. In Western Europe, we expect to see a rise of 30 kilos per average car between 2000 and 2005. That is a gain of 33 percent. (A kilo is 2.20462 pounds.) In North America, a jump of 35 kilos per average car is expected, a gain of 25 percent. In Japan, a rise of 22 kilos per average car is expected. This is a rise of 21 percent.

Looking at the rises between 1995 and 2000, the figures are just as breathtaking. In Western Europe, the rise was 29 kilos or 47.5 percent. In North America, the rise was a massive 43 kilos per average car or a rise of 45 percent. In Japan, the rise was 33 kilos or a 44.5 percent increase.

But, we hear you ask, can the growth picture in transport really be that wonderful? And the answer is a firm NO! The first problem is that not all of that consumption growth in transport is going to be from primary aluminum.

Secondary consumption as a percentage of primary consumption continues to rise. This is to be expected and is quite normal in all metal industries. But the automotive industry, in particular, is very keen on keeping as much metal as it can circulating within a closed loop. The average annual growth rate in secondary aluminum consumption during the 1990s has shown a stronger rate of growth at 3.6 percent versus 2.9 percent for primary And, as a percentage compared to primary consumption, it continues to grow quite rapidly and now stands at 47 percent.

The second big problem is the absolute need for the aluminum industry to always build enough new capacity to keep the car industry convinced that the aluminum industry can actually go on supplying the car industry with more and more aluminum each year at stable and fair prices.

To do this you need big bucks. The capital expenditure in dollars per tonne terms is scary It costs around $2,500 a tonne for brownfield expansions and anywhere between $4,000 to $6,000 a tonne for greenfield capacity. Demand for primary metal is growing at around 3.7 percent a year compound.

WHITEHALL, Mich. -- Airbus and Alcoa (NYSE:AA) officials joined together today at Alcoa Howmet Castings' facility in Whitehall, Michigan to acknowledge the contributions Airbus is making to America's aerospace industry and increased employment levels, as well as to recognize the products that Alcoa Howmet Castings is supplying to enhance the assembly of the A380, Airbus' new airliner and the world's largest commercial aircraft.

Airbus and Alcoa Howmet Castings were joined at the event by representatives of The Engine Alliance and Rolls-Royce, to whom Alcoa supplies engine components for the A380.

"Airbus could not build the A380 without the significant support of American aerospace companies," Allan C. McArtor, Chairman of Airbus North America, told an audience of national and local officials and Alcoa Howmet Castings employees this morning. "While out-sourcing is an issue for so many today, Airbus is delighted to be among those companies who are 'in-sourcing' high-technology jobs. Fifty percent of the A380's components and subsystems will be made in the United States. We are especially pleased to include Alcoa Howmet Castings, a global leader in designing and producing jet aircraft components, as a vital link in our supply chain."

"Every new aircraft presents a series of unique technical challenges. We are thrilled to be working with The Engine Alliance and Rolls-Royce to be a part of aviation history on the Airbus A380 and adding jobs to make that happen," said Michael Pepper, Vice President - Aerospace Sector at Alcoa Howmet Castings.

"The A380 is going to be the flagship of the 21st century," McArtor told the crowd. "This craft will carry 550 people 8,000 miles. The A380 is going to create a lot of jobs, not only for the next generation of Alcoa employees, but for those in many other companies as well."

Headquartered in Cleveland, Ohio, Howmet is the world's largest manufacturer of precision investment castings of superalloy, titanium and aluminium alloys, for jet aircraft and industrial gas turbine engines. Howmet and its affiliates operate 27 production facilities in the United States, Canada, France, Mexico, the United Kingdom and Japan.

In addition to Alcoa Howmet Castings, Alcoa's other aerospace businesses include: Alcoa Mill Products, Alcoa Europe Rolled Products, Alcoa Fastening Systems, Alcoa Engineered Products, Alcoa Wheel and Forged Products, and Latin American Rolled Products businesses. These businesses supply Airbus and the balance of the aerospace industry with aluminum sheet and plate, extrusions, fasteners, forgings, structural castings, and propulsion components such as super alloy turbine blades. Alcoa's aerospace revenues were approximately $2 billion in 2003 and reflect the company's expanded aerospace materials, product and technology portfolio.

Airbus spends more than $5 billion annually in the United States, which equates to around $15 million a day. In all, more than 100,000 jobs in the United States can be tied to Airbus.

STOCKHOLM -- The permanent structural changes required in the world aluminum industry cannot be effected without a more open, cooperative position by United States producers toward their international counterparts, according to Per-Olof Aronson, president of Granges Aluminum AB.

"We must cross the national barriers a little bit more," he said in an interview in Sweden. "It's a little bit surprising that you haven't done it to a larger extent, because the aluminum industry is very international. There are many typical multinationals in the market. Still, when it comes to physical business it is not enough."

Attention has focused on the U.S. because of the strong dollar and its impact on metal prices and the overall world economic scene. "It was not easy to foresee the impact, but many U.S. industries have not taken into account the import pressure you get from such a high dollar rate," he observed.

Cooperation and structural changes are being achieved successfully among European producers, but Aronson believes more efforts are necessary to counter the cyclical swings of the business. The U.S., which "showed the way" in product and market development, now needs to adapt to the new order on the production side, he said.

Indeed, he attributed Granges successful 1983 and 1984 first-half performance to such a strategy. The company is a net buyer of metal, and has placed its emphasis on fabrication and higher value-added products like extrusions and foil.

"If you want to avoid the worst swings in the business cycle, you have to be a net buyer," he said. "We try to avoid the most cyclical end use areas. We stay closer to the consumer."

Granges has "given up commodity sheet" because of the strong position of the Eastern Bloc producers, who hold most favored nation status in Sweden, concentrating instead on thin-gauge material, including can body stock.

Granges' smelting capacity is in Sundsvall, northern Sweden. In 1986 work will begin to retrofit the plant, increasing capacity by 10 percent to 90,000 metric tons per year, at a cost of Swedish kroner 250 million (8.6-$1 U.S.). The project involves 20,000 tons of production capacity, installing 150 KA (kiloamps) prebake pots, upgrading that output to 22,000 tons without any increase in energy consumption. Production will begin in 1987. This project, too, "reflects my thinking of the business cycle.

The second component of Granges' strategy is Sapa, its wholly owned extrusion business which combines a very strong market position in Sweden with successful product and market development work, one of the few profitable extrusion businesses in Europe, where capacity exceeds demand. "Europe uses 75 percent of its extrusion capacity," he noted.

Sapa's annual capacity is 50.000 tons, with one-third of its manufacturing and marketing abroad and the balance in Sweden. Sapa has four domestic plants: two in Vetlanda, one in Finspang and one in Skultuna: a plant in the United Kingdom: a facility in West Germany recently acquired from a bank following a bankruptcy; and one in the Netherlands in which Sapa holds a minority interest.

Granges' foil business is concentrated in two plants, one in Skultuna, the other in Helsinki. It operates two converter plants, in Skultuna and Odense, Denmark.

About 40 percent to 45 percent of Granges' business is domestic. The UK represents its principal export market, about 20 percent of its turnover. Norway, Denmark, Finland, West Germany, France and Italy take the balance.

Granges does not sell or buy in the U.S., although it does some trading, "more to improve the efficiency of our system, to make use of swapping possibilities. Aronson said, Granges is starting a "small organization" at its head office, to be called GA Trading, part of his philosophy of "opening up a little."

"The aluminum industry in general, producing companies, should do a lot more trading between themselves instead of going to traders," Aronson observed. Granges does a lot of trading with the major Norwegian producers.

Prohibitions to such an open approach, he maintains, are suspicions among producers, and it is this aspect of the industry, he believes, which is in need of change, especially in terms of the new order being created in the world marketplace.

"It is necessary that we stick more together in the aluminum industry, that you try to rebuild cooperation between various companies again, that we open up a little more," the executive said. He cited the U.S. as a key example, pointing to its need to restructure, and the inhibiting effects of anti-trust policies and trade laws.

"There is a need to get rid of high-cost production units and get some closer cooperation between the U.S. aluminum industry and metal producers abroad, like South America or Canada. That is the only way to balance the system economically," he said.

For example, Aronson suggests producers, that closed high-cost smelters, then would enter into supply contracts with some of the new producers to fill their metal needs.

TOKYO -- Japanese market demand for secondary aluminum in fiscal 1999 starting April 1 is forecast to be stronger than in the fiscal year ending this month, according to the Japan Aluminium Alloy Refiners Association.

Market demand in fiscal 1999 is projected at 1,405,300 tonnes, up 2.0 percent from 1,380,200 tonnes estimated for fiscal 1998. The fiscal 1998 figure represents a 5.3 percent decline from 1,502,651 tonnes in fiscal 1997, however, the association said.

The fiscal 1999 demand by area of use is: casting, 282,300 tonnes (compared with 273,500 tonnes in fiscal 1998), up 3.2 percent; diecasting, 680,700 tonnes (661,600 tonnes), up 2.9 percent; rolling, 326,000 tonnes (326,000 tonnes), unchanged; steelmaking, 84,700 tonnes (84,700 tonnes), unchanged; and other, 34,600 tonnes (34,400 tonnes), up 0.6 percent

Japanese exports of automobiles in fiscal 1999 are expected to see a decline because of increased Japanese production overseas. But on the positive side, the association said, sales of mini-cars are expected to increase in Japan, while the government's stepped-up public works projects are likely to put a stop to declining sales of trucks.

In the rolling sector, some recovery in demand for extrusions is anticipated. But demand for sheets is forecast to run level because an expected increase in demand from aluminization of automotive radiators will be negated by an encroachment on the can stock market by plastic bottles, the association noted.

Secondary aluminum demand for steelmaking use is forecast to be flat as domestic demand for steel is expected to be stagnant in both construction and manufacturing segments, coupled with a sharp drop in steel exports, the association said.

DETROIT - Ford Motor Co. has decided to put ultra-lightweight metal matrix composite (MMC) driveshafts into the police cruiser versions of its standard-size Crown Victoria cars, which are ticketed for production and sale in volumes up to 65,000 annually--a record for MMC driveshafts in North American-built passenger cars, according to auto industry sources here.

MMCs have a high elastic modulus, which allows driveshafts made of the material to operate at higher speeds.

The aluminum MMC driveshafts will be installed in the Crown Victoria Police Interceptor models, as Ford calls them. The automaker will buy the shaft assemblies from its subsidiary, Visteon Automotive Systems, Dearborn, Mich.

Ford sources said that Visteon would put the driveshafts together using seamless extruded and drawn aluminum matrix composite tubes weighing 6 or 7 pounds apiece from the Extrusion/Tube division, Lafayette, Ind., of Alcoa Inc.

The facility will acquire the MMC billets as the raw material for the tubes from the Duralcan USA unit, Novi, Mich., of Alcan Aluminium Ltd. The billets are the products of the Duralcan plant in Dubuc, Quebec.

Most driveshafts use steel tubes, which are the principal components of the assemblies. Some, however, use conventional aluminum tubes, and some of those, in turn, employ graphite fiber wrappings for strength.

Most aluminum matrix composite tubes that have been put into use up to now were going into pickup trucks, but passenger car applications began showing up here and abroad a few years ago. General Motors Corp.'s Chevrolet Corvettes, which started using them in 1997, employ the units as standard equipment in volumes of 26,000 to 32,000 per year--more than any other known car application to date.

The Ford Police Interceptor applications, which are virtually certain to outnumber the Corvette installations, will start to be used this year, although Ford sources did not give an exact launch date.

The second-largest domestic automaker expects the Police Interceptor models, which differ from the regular Crown Victorias only in the rear-axle ratio and the specialized equipment they have on board, to account for 85 percent of all police pursuit vehicle sales in the United States and Canada for the foreseeable future.

Duralcan's Dubuc plant, which has a rated capacity of 30 million pounds per year, is regarded as the largest aluminum MMC ingot and billet manufacturing facility in the world.

The MMCs Duralcan makes for driveshafts and other wrought products contain up to 20 percent aluminum oxide particulates. Those composites also are used in the Corvette driveshafts (AMM, March 4, 1996).

Most of the new applications for MMCs that have been launched in the auto industry around the world started in the 1990s. Most of the materials are aluminum composites, which usually save weight even compared with conventional aluminum extrusions, castings or forgings. In addition to driveshafts, the applications for MMCs include brake rotors and drums, engine cylinder sleeves and sprockets.

Numerous other parts made in high volumes by or for the auto industry, including engine piston components and connecting rods, are regarded by auto engineers as candidates for aluminum MMCs as the automakers turn out lighter-weight vehicles with lower emissions characteristics and higher fuel economy in the future.

The new MMC parts are expected to be made in a variety of ways, including high-pressure die casting, gravity semi-permanent mold casting, extruding, rolling and forging.

NEW YORK -- Aluminum mill product shipments at the service center level flopped to a 14-month low as 1999 got under way, in marked contrast to the aluminum industry as a whole. The industry laid claim to a 5.1-percent gain for sheet, extrusions and other mill products in January and a 10.8-percent jump in ingot.

The latest tally from the National Association of Aluminum Distributors (NAAD) put the Quick Pulse shipment index (1994=100) at 111.1 for January, down 4.9 percent from the same month last year to the lowest level since November 1997.

The Aluminum Association last week reported mill product shipments industry-wide at 628,187 tonnes for gains of 9.2 percent on the previous month and 5.1 percent on January 1998.

NAAD said that distributors, who had added to aggregate inventory last year to the tune of 6.4 percent, downloaded in the opening weeks of 1999 and ended January with the aggregate inventory down about 1.5 percent for the month and down nearly 5 percent from the year-earlier level.

NAAD's executive vice president, Julie S. Thane, said that distributors were looking for a flat year in 1999 volume-wise and were determined to improve margins by improving service and paying closer attention to costs.

A review and survey prepared for NAAD by Alcan Aluminium Ltd. and released late February projected a 1.5-percent gain in shipping volume for aluminum distributors this year compared with a 0.7-percent gain for the industry as a whole.

Alcan projected that distributors would boost their share of markets in which they compete directly with the aluminum producers and fabricators to 36.9 percent this year and 37.1 percent in 2000 compared with 36.6 percent in 1997.

NAAD's monthly poll found an eastern service center inclined to chalk January's shipment gain up mainly to some inventory rebuilding at the consumer level.

A southern distributor reported in with shipping volume holding even with the year-ago level but selling prices down 6 percent.

Market demand for products seen edging downward in fiscal '99

TOKYO -- Japanese market demand for aluminum products, including: rolled, cast, die-cast, forged and other products, is expected to edge downward by 0.3 percent in fiscal 1999 to 3,713,000 tonnes from an estimated 3,725,400 tonnes in the fiscal year just ended, according to the latest forecast by the Japan Aluminium Federation.

Although the decrease predicted for the year ending March 31, 2000, would be the third consecutive annual decline, it would be much smaller than the 9.5-percent fall in fiscal 1998 from 4,115,000 tonnes the previous year.
Demand for rolled products in fiscal 1999 is forecast to total 2,041,600 tonnes--up 0.7 percent from 2,027,600 tonnes the previous year-- comprising 1,013,500 tonnes of flat-rolled products (up 0.8 percent from 1,005,900 tonnes) and 1,028,100 tonnes of extrusions (up 0.6 percent from 1,021,700 tonnes.

Demand for cast products is anticipated to be 356,500 tonnes, down 1.4 percent from 361,600 tonnes, comprising 323,700 tonnes for automotive use (down 1.3 percent from 328,000 tonnes in fiscal 1998) and 32,800 tonnes for other uses (down 2.4 percent from 33,600 tonnes), according to the Japanese federation.

Demand for die-cast products in fiscal 1999 is expected to total 673,100 tonnes, down 1.3 percent from 681,900 tonnes--505,700 tonnes for automobiles (down 1 percent from 510,600 tonnes), 42,200 tonnes for motorcycles (down 3 percent from 43,500 tonnes) and 125,200 tonnes for other uses (down 2 percent from 127,800 tonnes).
Demand for other products include forgings, 22,900 tonnes (down 0.9 percent from 23,100 tonnes); electric wire, 46,000 tonnes (down 21.1 percent from 58,300 tonnes); steel-making, 108,100 tonnes (down 2.2 percent from 110,500 tonnes); powder, 14,500 tonnes (unchanged); and others, 32,400 tonnes (down 0.9 percent from 32,700 tonnes).

Imported products are expected to remain unchanged at 129,800 tonnes, while exports are forecast to increase 0.9 percent to 288,100 tonnes from 285,400 tonnes.

The Japanese economy is expected to enter a recovery phase in fiscal 1999, according to the federation, as a result of the government's economy-buoying program. "But the pace of the business recovery is expected to be very slow and gradual," the federation said, noting that most research institutes were predicting a negative growth for the Japanese economy in fiscal 1999.

For rolled products, the federation noted, demand for can stock and other aluminum products in the food sector is likely to remain flat, but there will be a slight increase in demand from the foil, consumer electrical equipment and machinery and automobile industries, with an overall increase in demand of 0.8 percent.

The automobile industry, the largest user of cast and die-cast aluminum products, is likely to continue to increase its use of aluminum. But, the federation noted, auto production will remain stagnant, and as a result demand for castings is likely to go down 1.4 percent and die castings by 1.3 percent.

NEW YORK -- The need for weight reduction in automobiles, for reasons ranging from accommodating a growing list of accessories going into increasingly larger and heavier vehicles to environmental concerns, are creating opportunities for aluminum in many forms: castings, sheet and extrusions, to name a few.

A relative newcomer in the field--semisolid metal (SSM) technology--is expected to spur aluminum's growth in passenger vehicles in the near term, attendees at a two-day SSM conference in Wheeling, W.Va., were told.
Michel Garat, foundry development manager for Paris-based Aluminium Pechiney, told the conference, hosted by Ormet Corp., that 1999-2001 "should see the start-up of large-volume SSM production of suspension parts, engine brackets" and other components. and that "the appearance of high-pressure injection gasoline engines should also boost (SSM) use."

Moreover, the need for weight reduction generated by the increase in equipment being placed in passenger vehicles and by environmental concern-inspired legislation was playing an important role, according to John Summerill, laboratory manager for British master brake cylinder manufacturer Lucas Varity. He said that the use of aluminum in the average passenger car had doubled since the mid-1980s and the trend line should rise steeply over the next several years.

Ray Donahue, director of materials engineering for Mercury Marine, told the conference that SSM had permitted the beneficial redesign of swivel brackets for outboard motors that yielded savings in manufacturing costs due to decreased cycle time, increased die life and other factors that more than offset the higher cost of the feedstock.

Market demand for products seen edging downward in fiscal '99

TOKYO -- Japanese market demand for aluminum products, including: rolled, cast, die-cast, forged and other products, is expected to edge downward by 0.3 percent in fiscal 1999 to 3,713,000 tonnes from an estimated 3,725,400 tonnes in the fiscal year just ended, according to the latest forecast by the Japan Aluminium Federation.

Although the decrease predicted for the year ending March 31, 2000, would be the third consecutive annual decline, it would be much smaller than the 9.5-percent fall in fiscal 1998 from 4,115,000 tonnes the previous year.
Demand for rolled products in fiscal 1999 is forecast to total 2,041,600 tonnes--up 0.7 percent from 2,027,600 tonnes the previous year-- comprising 1,013,500 tonnes of flat-rolled products (up 0.8 percent from 1,005,900 tonnes) and 1,028,100 tonnes of extrusions (up 0.6 percent from 1,021,700 tonnes.

Demand for cast products is anticipated to be 356,500 tonnes, down 1.4 percent from 361,600 tonnes, comprising 323,700 tonnes for automotive use (down 1.3 percent from 328,000 tonnes in fiscal 1998) and 32,800 tonnes for other uses (down 2.4 percent from 33,600 tonnes), according to the Japanese federation.

Demand for die-cast products in fiscal 1999 is expected to total 673,100 tonnes, down 1.3 percent from 681,900 tonnes--505,700 tonnes for automobiles (down 1 percent from 510,600 tonnes), 42,200 tonnes for motorcycles (down 3 percent from 43,500 tonnes) and 125,200 tonnes for other uses (down 2 percent from 127,800 tonnes).
Demand for other products include forgings, 22,900 tonnes (down 0.9 percent from 23,100 tonnes); electric wire, 46,000 tonnes (down 21.1 percent from 58,300 tonnes); steel-making, 108,100 tonnes (down 2.2 percent from 110,500 tonnes); powder, 14,500 tonnes (unchanged); and others, 32,400 tonnes (down 0.9 percent from 32,700 tonnes).

Imported products are expected to remain unchanged at 129,800 tonnes, while exports are forecast to increase 0.9 percent to 288,100 tonnes from 285,400 tonnes.

The Japanese economy is expected to enter a recovery phase in fiscal 1999, according to the federation, as a result of the government's economy-buoying program. "But the pace of the business recovery is expected to be very slow and gradual," the federation said, noting that most research institutes were predicting a negative growth for the Japanese economy in fiscal 1999.

For rolled products, the federation noted, demand for can stock and other aluminum products in the food sector is likely to remain flat, but there will be a slight increase in demand from the foil, consumer electrical equipment and machinery and automobile industries, with an overall increase in demand of 0.8 percent.

The automobile industry, the largest user of cast and die-cast aluminum products, is likely to continue to increase its use of aluminum. But, the federation noted, auto production will remain stagnant, and as a result demand for castings is likely to go down 1.4 percent and die castings by 1.3 percent.

A steady increase in demand and production of computer-related products, air-conditioners and leisure and sporting goods is expected to work in favor of forgings. But demand from the automobile industry, which accounts for approximately 60 percent, is likely to be slow, with a 0.9-percent decline predicted overall for forged products, the federation said.

NEW YORK -- The need for weight reduction in automobiles, for reasons ranging from accommodating a growing list of accessories going into increasingly larger and heavier vehicles to environmental concerns, are creating opportunities for aluminum in many forms: castings, sheet and extrusions, to name a few.

A relative newcomer in the field--semisolid metal (SSM) technology--is expected to spur aluminum's growth in passenger vehicles in the near term, attendees at a two-day SSM conference in Wheeling, W.Va., were told.
Michel Garat, foundry development manager for Paris-based Aluminium Pechiney, told the conference, hosted by Ormet Corp., that 1999-2001 "should see the start-up of large-volume SSM production of suspension parts, engine brackets" and other components. and that "the appearance of high-pressure injection gasoline engines should also boost (SSM) use."

Moreover, the need for weight reduction generated by the increase in equipment being placed in passenger vehicles and by environmental concern-inspired legislation was playing an important role, according to John Summerill, laboratory manager for British master brake cylinder manufacturer Lucas Varity. He said that the use of aluminum in the average passenger car had doubled since the mid-1980s and the trend line should rise steeply over the next several years.

Ray Donahue, director of materials engineering for Mercury Marine, told the conference that SSM had permitted the beneficial redesign of swivel brackets for outboard motors that yielded savings in manufacturing costs due to decreased cycle time, increased die life and other factors that more than offset the higher cost of the feedstock.
Ormet said that SSM technology was breaking out of a three-year period of stagnation and its weight-saving potential extended from passenger vehicles to bicycles, marine equipment and golf clubs.

Ormet in 1998 successfully resisted an SSM patent infringement lawsuit pressed by the former Alumax Inc. The suit was dropped a few weeks before Alumax was bought by Alcoa Inc.

TOKYO -- There are signs that the Japanese aluminum market has bottomed out, according to Junnouke Furukawa, president of Furukawa Electric Co. and chairman of the Japan Aluminium Association.

The executive, noting that shipments of flat-rolled products in March reached an all-time high of 122,603 tonnes, up 1.6 percent from a year earlier, said he sees a "dim light" over the horizon.

But shipments of extruded products in March were down 1.8 percent from the same month last year to 88,507 tonnes, a decline for 21 consecutive months but, it was pointed out, the smallest decline.

Total shipments in March, including flat-rolled and extruded products, reached 211,110 tonnes, up 0.1 percent from last year. Small as it may be, it was the second consecutive monthly increase.

Production in March totaled 207,635 tonnes, down 1.4 percent from a year ago--the 20th consecutive monthly decline. Output consisted of 118,978 tonnes of sheet and other flat-rolled products, down 0.8 percent, and 88,657 tonnes of extrusions, down 2.2 percent.

Aluminum is a relatively young industry compared with steel, Furukawa said, noting that there was no problem of overcapacity in the aluminum industry as contrasted to steel.

March results brought total production in fiscal 1998 ended March 31 to 2,307,697 tonnes, down 7.6 percent. It consisted of 1,270,702 tonnes of flat-rolled products, down 3.4 percent for the first decline in six years, and 1,036,995 tonnes of extrusions, down 12.3 percent.

Shipments in fiscal 1998 totaled 2,311,936 tonnes, down 7.4 percent--the second consecutive decline. It included 1,275,131 tonnes of flat-rolled products, down 3.2 percent for the first decline in six years, and 1,036,805 tonnes of extruded products, down 12.1 percent, according to the association

Changes in Japanese production on a year-to-year basis were: April 1998 (down 10.4 percent May (down 10.7 percent), June (down 9.4 percent), July (down 11.5 percent), August (down 9.0 percent), September (down 10.1 percent), October (down 10.4 percent), November (down 3.8 percent), December (down.5.0 percent), January 1999 (down 5.1 percent), February (down. 2.3 percent) and March (down 1.4 percent).

NEW YORK -- Aluminum prices went in two directions Friday, with Alcan Aluminium Ltd. hiking its postings for primary aluminum ingot and extrusion billet by 2 cents a pound for metal delivered to customers in June while ingot and billet prices dropped more than a cent a pound to their-lowest levels in seven weeks on the hedge and dealer markets.

Montreal-based Alcan set its ingot and billet prices at 68 cents and 78 cents a pound, respectively.

London Metal Exchange traders Friday let cash and three-month metal fall 1.2 cents a pound at the outset to 56.16 cents and 57.40 cents a pound, respectively-lows dating back to April 9-before struggling back up about a quarter-cent in later dealings.

On this side of the Atlantic, the Comex aluminum contract continued to struggle for a place in the sun but volume remained on the meager side. Light trading Friday saw the September contract at 61.85 cents a pound at midday, down 4.75 cents from its debut price two weeks earlier.

Meanwhile, local dealers early Friday put the Midwest delivery basis merchant price, which tracks prices on producer sales to dealers, at 61 to 61.25 cents a pound, 7 cents under Alcan's June posting, largely on the strength of the LME decline. The merchant price inched up a quarter-cent after midday.

The cash LME price averaged 56.1 cents a pound through May, down 9 cents, or nearly 14 percent, from the 65.1-cent-a-pound average in the same period last year. The nearly 5-cent-a-pound drop in the cash and three-month prices since the end of April could apply some downward pressure on recently posted price hikes on common alloy sheet and soft alloy extrusions.

LME and Comex traders found little news of a bullish nature in the smelter labor picture as the week drew to a close. Century Aluminum Corp., which faced a May 31 deadline on the current United Steelworkers union labor pact at its big smelter/rolling mill complex in Ravenswood, W.Va., awaits a rank-and-file. vote on its latest contract offer but the results aren't expected until about June 11. Ormet Corp., which faced a May 31 deadline at its smelter/rolling mill complex in Hannibal, Ohio, was expressing optimism that an agreement would be reached, as were USW negotiators.

Meanwhile, USW strikes continue at smelting and rolling mill facilities owned by Kaiser Aluminum Corp. and Southwire Corp.., but operations are continuing with nonunion personnel.

AMM 1998 'Top 50' Corporate Profiles

A.M. CASTLE & CO.

Metal sales: $792,846,000 (100 percent of gross sales)

Gross sales: $792,846,000

Metal products: Distributor and processor of carbon and stainless steels, specialty metals, non-ferrous metals, rounds, hexagons, squares and flat bars, plates, tubing, shapes, sheet and coil

Markets: Durable equipment producers

Headquarters: 3400 N. Wolf Rd., Franklin Park, Ill.

Sales and earnings:

Year Revenue Earnings
1998 $792,846,000 $18,522,000
1997 754,865,000 23,845,000
1996 672,617,000 26,104,000
1995 627,617,000 26,826,000


Summary: A.M. Castle believes it performed well in 1998 considering the difficult steel environment, but it still recorded a 22.3 percent dip in its 1998 earnings compared to the previous year.

The company blamed the drop in earnings principally on higher interest costs, along with higher amortization and depreciation levels, associated with investments made over the past three years. In 1999 and beyond, the company expects that those costs will moderate.

Net sales in 1998 rose 5 percent in 1998, to a record $793 million, compared to 1997. The increase reflected contributions from two acquisitions completed during the past two years, Castle said. In 1998, the company acquired Oliver Steel Plate Corp., Twinsburg, Ohio, a plate processor, and Aerospace Metals Ltd., Bury, England, a specialty metals distributor that specializes in bar products for the aerospace industry.

Castle also entered a joint venture with specialty metals distributor Energy Alloys Inc., Houston, which takes the company into the tubular business for the oil field industry, a highly specialized market niche.

However, operating earnings in the year-to-year comparison dropped 3 percent, to $48.7 million. The operating profit was affected by increased transaction activity as Castle said customers ordered in smaller quantities with more frequent deliveries. Operating earnings were also affected by increased expenses related to the start-up of new processing equipment and the integration of recent acquisitions.

"These expenses are largely behind us, Castle said in its annual report.

AK STEEL CORP. 11

Metal sales: $2,393,600,000

(100 percent of gross sales in 1998)

Gross sales: $2,393,600,000

Metal products: Hot and cold-rolled steels, aluminized, hot-dip galvanized, flat-rolled and other specialty steels

Markets: Automotive, appliances, construction, manufacturing

Headquarters: 703 Curtis St., Middletown, Ohio, 45043, (513) 425-5000: Website: www.aksteel.com

Sales and earnings:

Year Revenue Earnings
1998 $2,393,600,000 $114,500,000
1997 $2,440,500,000 $150,900,000
1996 2,302,000,000 146,000,000
1995 2,257,000,000 269,000,000
1994 2,013,200,000 257,600,000
1993 1,594,500,000 (42,700,000)
1992 1,404,500,000 (544,100,000)


Summary: For the full year 1998, AK Steel earned $114.5 million, or $1.92 per share of common stock, on shipments of 4.6 million tons Net sales were $2.4 billion, resulting in operating profit of $213.6 million, or $46 per shipped ton. In 1998, AK Steel's shipments to automotive customers were a record 2.3 million tons, surpassing by 11 percent its 1997 automotive shipments. AK Steel shipments to automotive customers have increased 155 percent since 1992.

The company achieved these numbers despite competing in a marketplace flooded with low-priced imports of foreign steel. The year brought about the early start-up of its new cold rolling and coating facilities in Rockport, Ind. At the same time, AK plants in Middletown, Ohio, and Ashland, Ky., posted record safety and productivity performances.

AK's percentage of shipments of value-added cold-rolled and coated products set a new annual record for the sixth consecutive year. Cold-rolled and coated products accounted for 68 percent of total shipments in 1998, up 9 percent from 1997 and reflecting product mix improvements from the start of cold-rolling and coating operations at Rockport.

During the year, two major units of AK's new Rockport Works began operations three months ahead of schedule. In June, operations commenced on the 800,000-tons-per-year hot-dipped galvanizing and galvannealing line, while in September. the 60,000 horsepower continuous carbon/stainless cold mill began operations. All the remaining units at Rockport Works were expected to be in operation later in 1999. AK Steel said it expected to begin finishing 300- and 400-series stainless flat rolled products at Rockport during 1999 to further enhance the mix of higher-margin products.

ALCAN ALUMINIUM LTD. 2

Metal sales: US$7,092,000,000 (91.0 percent at gross sales n 1998)

Gross sales: US$7,789,000,000

Metal products: Primary aluminum, fabricated, rolled sheet and foil prod ucts, litho sheet, alumina and alumina chemicals, secondary metal

Markets: Automotive, transportation, buildings and construction, containers and packaging, electrical, and alumina and chemicals

By establishing the Auto Aluminum Alliance, the Big Three domestic automakers and their largest aluminum suppliers have demonstrated once again the need for cooperation for the sake of progress.

Until now, aluminum companies have dealt with automakers and their requirements or challenges on a one-on-one basis. For example, there was Alcan Aluminium Corp.'s work with Ford Motor Co. on Ford's AIV (aluminum-intensive vehicle) research and development project, and Alcoa Inc.'s work with Chrysler Corp. (now DaimlerChrysler Corp.) on the Plymouth Prowler program.

Now, however, both of these aluminum companies and many others will be joining with the three domestic automakers to try to overcome some hurdles that have kept aluminum from gaining a lot more ground in automotive applications . . . hurdles that have limited its progress.

Because of the Auto Aluminum Alliance, General Motors Corp., Ford and DaimlerChrysler will have the help of numerous aluminum companies in clearing away technical and economic barriers to getting more aluminum into their vehicles. It's all part of the auto industry's efforts to put lighter-weight, more fuel-efficient and more environmentally friendly vehicles into the public's hands. The economic barriers that have to be brought down are those related primarily to manufacturing and design costs.

Cooperation by an entire industry isn't new. The steel and plastics industries have worked with the automakers for years through such consortia as the Auto/Steel Partnership (A/SP), the SMC Automotive Alliance and the Automotive Composites Consortium of the United States Council for Automotive Research (USCAR). The A/SP was established in 1987 and the two plastics groups in 1988.

Aluminum, the fastest-growing of all the major materials in autos, has caught up with plastics in the past couple of years and the two materials are now nearly on a par in a typical North American-built family vehicle. Most industry estimates for the plastics content in 1999 models are in a range of 240 to 250 pounds per vehicle, while most estimates for the aluminum content are in the 235- to 250-pound range. The rate of growth for plastics in autos has slowed in recent years, whereas the progress made by aluminum has been little short of stunning.

As the new alliance goes to work to try to meet a number of challenges from the automakers, the aluminum industry's progress may prove to be even greater than it's been up to now. As an initiative of USCAR's U.S. Automotive Materials Partnership (USAMP) and the Aluminum Association's Auto and Light Truck Group, the alliance's initial participants and agenda appear to be right for the times.

One of the first projects for alliance members will be to identify opportunities to reduce the cost of using aluminum sheet in cars and trucks. Another project that is more specific will be to improve the mass-reduction potential for-and manufacturing costs associated with-tailor welded aluminum blanks. According to Aluminum Association officials, this project also will focus on improving the dimensional quality and structural integrity of aluminum tailored blanks.

As part of another project involving scrap sorting, an alliance task force will work on developing a solution for the cost-effective recovery of aluminum from scrapped autos. Alliance members also will try to develop standardized test methods for evaluating aluminum sheet properties and performance data for product design, modeling and quality assurance. The alliance also will tackle the job of establishing an automotive aluminum repair advisory board to guide the dissemination, collection and development of aluminum automotive repair information. The new organization also will explore the potential for hydroforming aluminum components and for forming and assembling aluminum parts with electromagnetic force.

The new alliance will take on virtually all technical and economic challenges involved in applying aluminum to autos, hoping to pave the way to a bigger market for aluminum in the form of castings, extrusions, stampings, drawn and roll-formed components, welded and bonded subassemblies and forgings.

Aluminum executives acknowledge that cost is a "significant issue" for the continued growth for automotive aluminum, noting that aluminum is three to five times more expensive than automotive steel, pound for pound. That is why much of the work done by the alliance is expected to be in areas--including component design and manufacturing--that will bring the cost of finished aluminum parts into line with components made of other materials.

Members of the Aluminum Association's Auto and Light Truck Group helping to launch the new alliance are Alcan; Alcoa; Aluminum Precision Products, Santa Ana, Calif.; Arco Aluminum Inc., Louisville, KY.; Hydro Raufoss Automotive Inc., Holland, Mich.; Kaiser Aluminum & Chemical Corp., Pleasanton, Calif.; Nichols Aluminum Co., Davenport, Iowa; Reynolds Metals Co., Richmond, Va.; V.A.W. of America Inc., St. Augustine, Fla.; and Wabash Alloys division, Wabash, Ind., of Connell LP.

NEW YORK -- The Hydro Aluminum Metal Products division of Norway's Norsk Hydro AS said Monday it will spend $33 million to build a 90,000-tonne-per-year aluminum remelt plant in Henderson, Ky., to provide feedstock for competitively priced extrusion billet it will sell in a U.S. market it contends is metal-short.

Through its Hydro Aluminium Extrusions unit, Oslo-based Norsk Hydro ranks as one of the world's largest aluminum extruders, with plants in the United States and Europe.

Hydro Aluminum Metal Products said that its billet would match primary aluminum billet in quality and it had a built-in cost advantage that could be offered to extruder customers because reclaimed aluminum needs but 5 percent of the energy required to make primary metal.

James Walters, president of Hydro Aluminum Metal Products' Kentucky-based U.S. arm, Hydro Aluminum Louisville Inc., said there would not necessarily be a direct price advantage vis-avis primary billet and that the economy would be derived from a better quality compared with other secondary billet. Walters

said that the secondary billet would be "interchangeable with primary-quality aluminum produced from smelters." The new unit, is expected to be up and running in 2001.

Walters said that the Louisville unit also handles the parent company's extensive trading activities in the U.S. and markets primary metal drawn from tolling agreements with Northwest Aluminum Inc.'s Goldendale, Wash., smelter primary aluminum smelter--for which Norsk Hydro and Northwest Aluminum late last year launched a $55-million project that will boost capacity of the 168,000-tonne-a-year smelter by 15 percent (AMM, Oct. 12, 1998)

Walters said the aluminum industry is "not producing enough (billet) to meet current and expected demand, in particular from the transportation and building and construction industries."

The latest tally from the Aluminum Association put the U.S., aluminum industry's incoming orders for extruded shapes and tube through May 13.9 percent ahead of the pace for the same 1998 period. A considerable backlog is implied, inasmuch as the industry had only a 2.8-percent lead at the shipping dock in the first four months of the year.

NEW YORK -- Ale an Aluminium Ltd. once again opted to hold its postings for primary aluminum ingot and extrusion billet unchanged through September after ingot prices held steady on the hedge and dealer markets during August.

The Montreal-based integrated international aluminum producer left its postings at 68 cents a pound for ingot and 78 cents a pound for alloy 6063 extrusion billet- levels selected for both July and August. Richmond, Va.,based Reynolds Metals Co., which has been putting more emphasis on the ingot sector after selling off much of its mill products and fabricating base over the past year or so, reportedly held its September tags unchanged at 69 cents a pound for unalloyed ingot and 79 cents for 6063 extrusion billet.

The London Metal Exchange cash aluminum price, which forms the basis for most of the world's aluminum ingot pricing and much of North American producer pricing for aluminum can stock, common alloy sheet, soft alloy extrusions and some other mill products, averaged 59.5 cents a pound in August, not much changed from July's 59.4 cents or June's 59.3 cents.

Premiums applied to producer metal sold to dealers, Midwest delivery basis, have centered on 4.5 cents a pound over late spring and thus far this summer. On this basis and with the LME cash price finishing Friday at 60.63 cents, he merchant price started the new week at 65 cents to 65.25 cents a pound, 3 to 4 cents under Alcan's September posting.

Held in check by rising imports, U.S. aluminum industry shipments of primary and secondary ingot in the first half of 1998 were virtually unchanged from the same 1997 period at 1,321,827 tonnes, according to the latest Aluminum Association and U.S. Department of Commerce tallies.

Imports jumped 234,330 tonnes, or 20.9 percent, to 1,354,850 tonnes, topping the domestic industry tally by more than 33,000 tonnes. U.S. aluminum industry purchases from Russia are running at a record clip this year. Imports from Australia also are higher, while metal brought in from Canada was down in the first half of this year.

TOKYO - In what is seen as a move leading eventually to a merger of their aluminum businesses, Furukawa Electric Co., whose aluminum division is Japan's third-largest fabricator, and Sky Aluminium Co., Japan's fifth-largest, will form a 50-50 joint venture company in October.

The new company is an outgrowth of the business cooperation agreement concluded by the two companies last January. It will study the possibility of pooling the resources of the two fabricators initially in areas of long-term capital investment planning, purchasing of raw materials and equipment, physical distribution and transportation to reduce operating costs, according to spokesmen.

The two companies have been promoting the exchange of technology and personnel through the cooperative agreement since last January. But the new joint venture, to be known as Alfus Ltd., will serve as a conduit between the two fabricators to further facilitate their collaboration.

The executives said that Furukawa Electric, which is involvedin both rolling and extrusions, has an annual production capacity of 250,000 to 260,000 tonnes, while Sky Aluminium has a rolling capacity of approximately 160,000 tonnes per year.

The executives declined to speculate if the joint venture would eventually develop into a merger combining Furukawa's aluminum division and Sky Aluminium. But the move is seen by many market observers as heralding a big shakeup of Japan's aluminum industry confronted with growing international competition.


"In North America, there are only two majors left--Alcan and Alcoa," one veteran aluminum executive noted. "There are several in Japan--which is too many."

If the Furukawa-Sky merger materializes, it would create Japan's largest aluminum company, surpassing current leader Kobe Steel Ltd. Other major producers are Sumitomo Light Metal Industries Ltd., Mitsubishi Aluminum Co., Nippon Light Metal Co. and Showa Denko KK.

DUSSELDORF; Germany - A late-1980s design for aluminum bridge decks has beer gaining favor in Scandinavia and could presage a day when more aluminum is used in bridges in cold climates, the European Aluminium Association said in its quarterly report issued this week.

The group said that aluminum bridges up to 100 meters (328 feet) long capable of carrying heavy road traffic were being successfully erected in Scandinavia. where temperature swings from minus 35 degrees Celsius (minus 31 Fahrenheit) to 35 degrees C (95 degrees F) have led to high maintenance costs for steel and concrete bridges.

According to the association, a bridge deck replacement system consisting of hollow aluminum extrusions formed into an orthotropic plate and coated with either acrylic composite or asphalt to reduce surface wear has enabled builders to construct lightweight bridges that can withstand salt and other winter corrosives better than steel and concrete.

While the use of aluminum in pedestrian bridges is nothing new, the European association said that the tendency to use aluminum to replace steel and concrete spans in existing road traffic bridges is a new development that could eventually mean aluminum spans being used in 500 bridges across Scandinavia.

As many as 80 aluminum bridges have been built in Europe, including 45 deck replacements in Scandinavia using the new technique. One of the examples cited in the report was a 39-meter (128feet) span that used 28 tonnes of aluminum.

DUSSELDORF, Germany - European consumption of aluminum semifabricated products will continue to grow in the coming year, albeit at a much slower pace than previously, while consumption of primary aluminum might decline, the European Aluminium Association projected in its quarterly report.

The report said that production of primary aluminum had been running nearly 8 percent ahead of 1997, with 2.4 million tonnes produced through August, while demand was projected to be just 1 percent ahead of 1997. Last year, primary aluminum production averaged 291,333 tonnes per month in the last quarter.

"Demand is expected to drop slightly by the end of this year in comparison with 1997," the report said. "The outlook for 1999 seems somewhat uncertain and will depend very much on developments in Japan and other Asian countries and Latin America."

For semis, the group projected that 1998 consumption of rolled products would total 3.1 million tonnes, 2.7 percent more than in 1997. Demand for extrusions was projected to barely top 2 million, a 3.7-percent increase from the previous year.

Meanwhile, production of rolled products was running 2.4 percent ahead of last year through the second quarter at an estimated 1.8 million tonnes,. and production of extrusions, including tubes and welded tubes, was running 5.1 percent ahead of last year at an estimated 963,000 tonnes.

NEW YORK -- The U.S. aluminum industry booked 22.6 percent more mill product business last year and came down to the wire with mill product shipments up 14.7 percent and inventories up 5 percent.

The latest tally from the Aluminum Association, based on Commerce Department data, put the industry's total shipments, including ingot, up 18.7 percent coming into December at 8,589,385 metric tons.

The 18.7-percent gain in shipments, about 1.35 million tons, was not reflected in recent 1994 reports by Aluminum Co. of America, which reported shipments down 1 percent, Reynolds Metals Co., which reported 1994 shipments up 5.4 percent, or Alcan Aluminium Ltd., which reported an 8.7-percent gain and credited strong demand in Europe as well as the United States.

Alcoa cut its domestic primary production sharply in 1993-94; Reynolds cut production in the United States in 1993 but kept its Quebec smelter capacity running full-out, and Alcan cut production in the United States, Canada and Great Britain.

The Aluminum Association's latest tally put the U.S. aluminum industry's inventory of ingot, mill products and scrap coming into December at 1,970,879 tons compared with 1,873,809 tons reported for the end of 1993.

The latest tally by the International Primary Aluminium Institute put the total inventory held by its U.S. and Canadian members at 1,757,000 tons coming into December, down 1 percent from the end-1993 level.

The Aluminum Association tally of orders booked for aluminum sheet and other mill products was up 1,416,583 tons, or 22.6 percent last year, to 7,681,257 tons. The showing was well ahead of mill product shipments, which were running about 14.7 percent ahead of 1993 at the 11-month mark.

Some aluminum industry analysts have suggested that the good showing in the shipment column reflects a measure of hedge buying and inventory building at the end-user level and that the larger gain in the bookings column also reflected the effects of last year's rapid-fire price increases on common alloy sheet and soft alloy extrusions, and lengthening lead times at the mills.

Orders for aluminum sheet other than can stock, and for aluminum plate, were up 39 percent last year, while orders for can stock squeaked through with a 3.1-percent gain in a year that saw shipments of aluminum beverage cans jump 8.2 percent to a record 102.88 billion cans.

The gain in aluminum sheet shipments for 1994 looked more like 17 percent coming into December.

Aluminum extrusion bookings were up 31.6 percent, or 368,349 tons, to 1,532,205 tons last year; extrusion shipments at the 11-month mark were up much less--11.6 percent, or 134,849 tons, to 1,293,749 tons.

NEW YORK -- Alusuisse Lonza Group's decision to merge itself into Germany's Viag AG next August caps a restructuring plan that began in the mid-1980s and included a complete exit from the United States, where the Zurich-based aluminum, chemicals and packaging company once had sizable alumina refining and primary aluminum smelting assets, considerable aluminum rolling capacity and an aluminum scrap recovery unit.

The proposed combination, which would put about 700,000 tonnes of annual primary aluminum capacity and sizable mill product capacity under one flag-all of it behind a tariff wall defending European Union aluminum ingot and sheet producers-isn't expected to have much direct impact on the U.S. market.

Switzerland accounted for a mere 187 tonnes out of the approximately 2 million tons of primary and secondary ingot imported into the U.S. market last year, and 2,606 tonnes of the 560,000 tonnes of aluminum mill products also imported in 1997. Germany sent 1,015 tonnes of unwrought aluminum here in 1997, along with 38,227 tons of mill products-the latter equal to roughly 7 percent of this country's total mill product imports.

When it finally bowed all the way out of the U.S. aluminum business in 1994 with the sale to Ormet Corp. of a large rolling mill in Hannibal, Ohio, a secondary aluminum operation in Bens Run, W.Va., and small mill product operations in Tennessee and Mississippi grouped together as Consolidated Aluminum Corp., Alusuisse said, "We want to focus on our aluminum business in Europe and expand a little in Asia."

Earlier divestments included primary aluminum smelting assets in Hannibal (acquired by Ormet); smaller smelting units in Lake Charles, La., and New Johnsonville, Tenn. (both long out of commission); and an alumina refinery in Louisiana.

Robert Unger of Planned Technology Associates of Ridgewood, N.J., a former director of technological and market research for the Swiss company's Alusuisse of America unit, suggested that the decision to merge into Viag had pronounced defensive motives behind it.

Noting Aluminum Co. of America's recent acquisition of Alumax Inc. and the Pittsburgh giant's earlier acquisition of aluminum assets in Spain, Italy and Hungary-not to mention earlier buildups of European positions by Alcan Aluminium Ltd. and Norsk Hydro AS-Unger said, "One could speculate that considerations behind the proposed merger include guaranteeing Alusuisse full participation in the future euro-based European Economic Union.

"In effect, looking at the market from an aluminum viewpoint, cross-border combinations are now under way in order to achieve the perceived economic size required to supply-competitively-current and future markets."

If the combination goes through, Unger added, "one could speculate that one or two other possible combinations are possible in Europe, the U.S. and Japan."

The merger, Unger said, would give the combined company a very strong position in Germany; an improved position in the overall European market, particularly when it comes to foil, sheet and extrusions for the packaging and transportation markets, but only a modest presence in the U.S. already held by Viag through its minority interest in a consortiumowned smelter in Quebec, lately indisposed to expand because of future power rates; and its extrusion operations in New York, Florida and Arizona.

CARADON, ONE of the UK's best performing building stocks this year, yesterday said it had sold its plumbing businesses to HSBC Private Equity in a pounds 422m cash deal to help fund further acquisitions.

The company, which has seen its share price rise 21 per cent since January, also said it will change its name to Novar. It operates Novar Electronics, a building controls company in the US.

"The funds will initially be used to pay down debt but then we'll ... buy companies operating in the fast-growing intelligent building market [electric cabling and security services]," said Caradon chief executive, Jurgen Hintz, adding the company was not in talks to make further purchases. Its shares closed up 4p to 187.5p.

Caradon is focussing on its operations in security printing, aluminium extrusions and electric cabling.

HSBC will gain Caradon's name and brands, including Mira Showers, Stelrad, Henrad Radiators, Ideal Boilers, and Twyford Bathrooms. Caradon's plumbing division, which is being sold debt-free, reported an operating profit of pounds 35.2m on sales of pounds 338.3m in 1999. Caradon will make a pre-tax profit of about pounds 134m on the sale, and will use the funds to slash debt to about pounds 60m, from pounds 479m.

DETROIT -- In what is expected to be the biggest new automotive application of any kind for aluminum extrusion alloys getting under way this year, General Motors Corp. will switch the bumper beams on the front and rear of all of its standard-size cars in the Buick, Oldsmobile and Pontiac lines to aluminum from steel.

If GM builds and sells as many of those cars as it thinks it will, the new bumpers will consume 8.3 million pounds or more of aluminum per year, according to GM sources here.

That's more than the big automaker is expected to use in two other important new applications for aluminum extrusion alloys starting up this year--the engine cradles in two Chevrolet car lines and the radiator enclosures in standard-size Chevy, GMC and Cadillac sports utility vehicles (AMM, Dec. 17).

Because of all these applications as well as certain others, 1999 is shaping up as a breakthrough year for extrusion grades of aluminum, which typically are magnesium-silicide alloys, in the North American auto market. Although domestic automakers have been using light-alloy extrusions in their vehicles for years, the year-to-year increase in applications is generally small and relatively difficult to measure.

GM sources said the new bumper beams, which will weigh around 26 pounds per car, will be used on the -redesigned Buick LeSabres, Olds Auroras and Pontiac Bonnevilles coming out this year as 2000 models. The new Auroras will replace the Olds 88s in GM's product stable.

More than 14 million pounds of steel per year will be replaced by the aluminum bumper beams, these sources said. The reinforcement beams will be covered by plastic fascias on all three car lines and will serve as the principal structural components in the front and rear bumper systems.

GM will buy the beams from Hydro Raufoss Automotive, Holland, Mich., which is expected to get its metal from one or two sources. The likeliest suppliers of the aluminum 6082 alloy are Hydro Goldendale, Seattle, Wash., and/or Alcan Aluminium Ltd., Montreal.

Hydro Raufoss also will make the new extruded bumper beams that GM will employ on its redesigned Cadillac DeVille luxury cars for 2000, GM sources said. Altogether, the aluminum used in the new Buick, Olds, Pontiac and Cadillac car bumpers will exceed 10 million pounds annually. In the DeVille bumpers, too, the aluminum will be replacing steel.

NEW YORK -- Alcan Aluminum Corp. has hired away Stephen J. Bettcher, a 21-year veteran of the hotly competitive, $4-billion-a-year-plus aluminum can stock business, from Kaiser Aluminum Corp. as vice president, global can stock sales and marketing.

Alcan Aluminum, Cleveland-based U.S. arm of Canada's Alcan Aluminium Ltd., did some serious tire kicking at Kaiser Aluminum's big Trentwood, Wash., aluminum rolling mill at one point in 1998, but did not pursue the matter. Both the U.S. unit and the Montreal-headquartered parent company have been building up substantial aluminum can stock capacity in the '90s in the United States, Europe and Brazil.

Trentwood, along with four other large Kaiser plants in the United States, has been run with non-union personnel since the United Steelworkers went on strike Sept. 30.

Prior to his long stint as Kaiser Aluminum's vice president, can stock sales and marketing, Bettcher, who will make his headquarters in Cleveland, held sales positions in Kaiser's ingot, forgings, extrusions and sheet and plate departments. He has been chairman of the Aluminum Association's Aluminum Can Committee since 1991.

NEW DELHI, India, - India's leading private aluminum producer, Hindalco Ltd., will double the production capacity of its aluminum foil plant by December 1999 in an effort to capture the growing domestic foil market.

Hindalco's foil plant at Silvasa in Western India has an installed capacity of 5,000 tonnes per year and began operation in February.

Hindalco president Askaran Agarwala said the company will invest an additional $10 million to increase the foil plant's capacity to 10,000 tonnes per year.

He said Hindalco will sell 70 percent of the output in the domestic market, while 30 percent is made for exports.

Hindalco executives said the company is continuing to pursue the acquisition of Hyderabad-based primary aluminum producer Pennar Aluminium Co., which has asset value worth $75 million (AMM, May 11).

Hindalco, headquartered at Mumbai, is India's largest private producer of aluminum with installed capacity to manufacture 210,000 tonnes per annum of aluminum and 350,000 tonnes per annum of alumina. Hindalco also produces value-added aluminum sheets, extrusions and rods.

The company is planning investments of about $475 million dollars to increase capacities of alumina and aluminium plants and value-added units.

Five companies to provide $4.3 billion of aluminum By BOB REGAN

NEW YORK -- Boeing Co.'s Commercial Airplane Group Monday named five aluminum companies that will provide $4.3 billion worth of flat-rolled aluminum and extruded aluminum products it expects it will need for commercial aircraft production over the next 10 years.

The Seattle-headquartered aircraft/aerospace giant in July selected Thyssen Inc. North America as its exclusive distributor of flat-rolled aluminum and certain small and intermediate-size extrusions. The 10-year contract, seen posing far-reaching implications for the existing metals distributor networks serving Boeing, prompted Thyssen to form a new division, TMX Aerospace, to administer the Boeing contract, valued at $300 million over the 10-year period (AMM, July 8)

Asked how the five aluminum companies-Aluminum Co. of America, Pittsburgh; Kaiser Aluminum Corp., Houston; Century Aluminum Co., Monterey, Calif.; Universal Alloys Co., Canton, Ga.; and Hoogovens Aluminium Walzprodukte GmbH, Koblemz-were selected, a Boeing spokeswoman said there was an open bidding procedure and the choices were based on prices and such other criteria as business plan alignment, location, warehousing and other factors. At least two companies- Alcoa and Kaiser-had been selected earlier (AMM, March 23).

LONDON -- The European Commission has approved the acquisition of VAW Aluminium by Norway's Norsk Hydro. "The acquisition, does not give rise to any competition concerns in Europe due to only minor overlaps of the companies' activities and limited market shares," the EC said. While the commission noted that Norsk Hydro and VAW had overlapping activities in primary aluminum and semifinished products (flat-rolled products and extrusions), said "the combined entity's market positions would be relatively small in these markets and would not lead to any competitive concerns." The EC said its' investigation concluded that "there are a number of significant competitors who are internationally active in these markets.

Man Industries (India) Ltd, India's third largest SAW pipe manufacturer and also the largest manfucturer-exporter of aluminium extrusions in the country, has registered a growth in sales and profits for the year ended March 31, 2004.

According to News Today, sales at Rs 502 crore, have registered a growth of 83 per cent over the Rs 274 crore recorded in the previous year.

Operating profit before depreciation, interest and tax for the year at Rs 75.41 crore rose by 103 per cent over the previous year.

DRUNEN & PITTSBURGH -- Aluminum extrusions produced by Alcoa Netherlands in Drunen helped to make a home featured on the popular U.S. television program "Extreme Makeover: Home Edition" livable for a paralyzed man. Alcoa Netherlands is the sole supplier of aluminum extrusions to Handi-Move International, a leading manufacturer of lift and care systems for disabled persons based in Belgium. Handi-Move's U.S. distributor is SureHands(R) Lift & Care Systems of New York.

The premise of Extreme Makeover: Home Edition is to challenge a team of professional designers to renovate a home in a week. Earlier this season, the designers helped a handicapped man accomplish normal activities for daily living by installing a SureHand(R) Lift & Care System - a motorized system that moves a person in a so-called body-support suspended from tracks installed on the ceiling. Alcoa extrusions are used for the ceiling tracks of the navigation system.

According to Serge Timmermans, Alcoa account manager for Extrusions and End Products, Handi-Move chose Alcoa aluminum extrusions for its products because of four attributes of the metal: weight, shape, machining and durability. "Handi-Move products use profile shapes that are made possible by aluminum extrusion forming, which is not possible with steel. In addition, aluminum profiles are easier to machine and bend than steel ones. And finally, aluminum is the preferred metal for a tool such as the Handi-Move ceiling track because of aluminum's durability and it's lightweight. It will stay in good physical shape even in humid surroundings," said Timmermans.

About Alcoa Europe Extrusions & End Products

With almost 50 presses in 6 European countries, Alcoa Europe Extrusions & End Products (EEP) is one of the largest extrusion companies in Europe. Aluminium extrusions for automotive or aerospace applications, commercial transportation profiles, building and construction systems, heat sinks for electronic components, micro extrusions, industrial products or other - Alcoa EEP is a one-stop-shop for aluminium extrusion requirements. It is ISO 9001, ISO 14000, QS 9000 & EURAS EWAA Qualanod and Qualicoat certified supplier.

Alcoa in The Netherlands

Alcoa has been active in The Netherlands since 1967. Products produced in The Netherlands include extrusions, architectural systems, building products, packaging, ingot and end products like greenhouse systems, light poles and flagpoles. Alcoa Netherlands has manufacturing facilities in Raamsdonksveer, Drunen, Harderwijk and Kerkrade.