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US aluminum extrusion demand expected up in 2013 despite slow start: Sapa

Washington (Platts)--30 May 2013 520 pm EDT/2120 GMT


US aluminum extrusion demand is expected to rise slightly this year, despite a slow start to the year, according to Jeff Henderson, director of marketing and business development for Sapa North America.

The market has gotten off "to a slower start," he said, citing Aluminum Association data that showed that the US net new order index for extruded products was down 3.1% January-April 2013 versus a year before.

However, extruded product orders were up 11.6% in April from March and up 10.8% from April 2012.

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For Sapa's part, Henderson said the extrusion major is seeing demand in the "positive territory although it's modest." Sapa for the year is expecting extrusion demand growth of 1-3% year over year.

But, Henderson cautioned, that is predicated on two key issues -- a strong automotive sales rate and momentum in the housing market. LMC Automotive is forecasting a total light vehicle sales outlook for 2013 at 15.4 million units for North America. That is flat from 2012, which was up 18% higher than 2011.

And he said Sapa's second-quarter order intake "was better, especially in residential building and construction." However, rod and bar demand was off 4-5%, he said, citing Aluminum Association figures, and this is offsetting growth seen in the other areas.

Henderson said there are new opportunities for extrusions in the transportation, construction and electrical applications.

"There are a lot of development areas for us," he said. "And we are stepping up to the plate and engaging on the development side." He noted that market development has "not been strong point for extrusions in the past," and Sapa is asking extruders to work with the automakers on new parts and platforms and other technology for aluminum extruders.

"We can deliver the parts and products they [the automotives] need, but this is going to take a tremendous amount of technical investment."

To promote this, Sapa this year is hosting various Profile Academy sessions in which it seeks to help industry attendees "provide a better understanding of the various manufacturing processes of aluminum," according to a company news release.

"The goal of these events is to inspire and educate those who wish to gain a stronger understanding of aluminum, as well as share the company's concept of Aluminology -- the science of solving problems with extruded aluminum products," the company said.

"These are brainstorming sessions about what can be done" to capture potential growth, said Henderson. He noted that "heavy investment has to be done." But the reward is, for example, "hundreds of millions of additional pounds of aluminum tubing for the household and commercial appliance sectors.

"Big payoffs have yet to be seen," he said.

--Tina Allagh, tina.allagh@platts.com
--Edited by Derek Sands, derek.sands@platts.com





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