Well. Famous household name, Alcoa.
Continued at link.
http://www.msn.com/en-us/money/marke...=ansmsnmoney11
Alcoa Inc.’s latest aluminum-making cutback is the clearest sign yet of a regime change.
For 127 years, the New York-based company has been churning out the lightweight metal used in everything from beverage cans to airplanes, once making it a symbol of U.S. industrial might. Now, with prices languishing near six-year lows, it’s wiping out almost a third of domestic operating capacity, Harbor Intelligence estimates. If prices don’t recover, the researcher predicts almost all U.S. smelting plants will close by next year.
While that’s a big deal for the U.S. industry and the people it employs, it doesn’t mean much for global supplies. Alcoa’s decision to eliminate 503,000 metric tons of smelting capacity accounts for about 31 percent of the U.S. total for primary aluminum, but less than one percent of the global total, according to Harbor. For more than a decade, output has been moving to where it’s cheaper to produce: Russia, the Middle East and China. A global glut has driven prices down by 27 percent in the past year, rendering American operations unprofitable and accelerating the pace of the industry’s demise.
“You’ve seen a fair clip of closures in the U.S., that is just unfortunate, but a development that’s very difficult to change,†Michael Widmer, head of metal markets research at Bank of America Corp. in London, said in a telephone interview. “It means you’ll just have to purchase from somewhere else.â€
That’s exactly what Jay Armstrong, the president of Trialco Inc. in Chicago Heights, Illinois, is doing. The company, which turns aluminum into finished manufactured products, now buys about 80 percent of the supplies it turns into car wheels from overseas. That’s up from 40 percent five years ago, he said.
“It’s not the kind of business where we’re going to pay more and buy all American,†Armstrong said in a telephone interview. “It’s too competitive a business to do that.â€
Alcoa Inc.’s latest aluminum-making cutback is the clearest sign yet of a regime change.
For 127 years, the New York-based company has been churning out the lightweight metal used in everything from beverage cans to airplanes, once making it a symbol of U.S. industrial might. Now, with prices languishing near six-year lows, it’s wiping out almost a third of domestic operating capacity, Harbor Intelligence estimates. If prices don’t recover, the researcher predicts almost all U.S. smelting plants will close by next year.
While that’s a big deal for the U.S. industry and the people it employs, it doesn’t mean much for global supplies. Alcoa’s decision to eliminate 503,000 metric tons of smelting capacity accounts for about 31 percent of the U.S. total for primary aluminum, but less than one percent of the global total, according to Harbor. For more than a decade, output has been moving to where it’s cheaper to produce: Russia, the Middle East and China. A global glut has driven prices down by 27 percent in the past year, rendering American operations unprofitable and accelerating the pace of the industry’s demise.
“You’ve seen a fair clip of closures in the U.S., that is just unfortunate, but a development that’s very difficult to change,†Michael Widmer, head of metal markets research at Bank of America Corp. in London, said in a telephone interview. “It means you’ll just have to purchase from somewhere else.â€
That’s exactly what Jay Armstrong, the president of Trialco Inc. in Chicago Heights, Illinois, is doing. The company, which turns aluminum into finished manufactured products, now buys about 80 percent of the supplies it turns into car wheels from overseas. That’s up from 40 percent five years ago, he said.
“It’s not the kind of business where we’re going to pay more and buy all American,†Armstrong said in a telephone interview. “It’s too competitive a business to do that.â€
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