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''Good days'' for aluminum: surging demand for aluminum products is outstripping supply, leaving service centers happy but hungry for inventory.

Article Excerpt
North American producers and distributors alike are basking in the glory of the first truly strong aluminum market in years. Characterized by strong demand and tight supplies across the board, the booming market is showing no signs of weakening anytime soon.

"These are the good days," says Robert Mraz, vice president of sales and marketing for TW Metals Inc., Exton, Pa. Demand this year has been excellent for both aerospace and non-aerospace related aluminum end-use markets, and is likely to continue growing, possibly even at a faster clip, next year.

Keith Harvey, vice president of sales and marketing for Kaiser Aluminum Fabricated Products, Laguna Niguel, Calif., shares his optimism. "We are seeing a good rise of demand after coming out of the recession and with the start of a new cycle of recovery." In fact, he says, with several end-use markets recovering much faster than had been anticipated, it has been hard for the mills to keep up with the demand, especially for certain products such as heat-treated plate.

Other factors are contributing to the tight supply, including declines in smelter capacity in the Pacific Northwest and elsewhere, and a reduction in rolling and billet producing capacity, experts say.

The North American market has become very hot very quickly, says Dean Blakeney, general manager of Corus Aluminum Rolled Products USA, Schaumburg, Ill. In fact, Carmine Nappi, director of industry analysis for Alcan Inc., Montreal, notes that while historically there is a high correlation between aluminum demand and GDP growth, this year aluminum has been outperforming GDP. This is at least partly the result of inventory restocking by both distributors and end users, which isn't very surprising given the lean inventories of the past few years.

"Everyone knew we were going into a booming time and knew that inventories would play a role," says Pat Records, salesman of Westlake Metal Industries, North Ridgeville, Ohio. "No one invested in inventories for several years. When things started to get busy, everyone started buying at the same time and that created a shortage."

Hank Sattlethight, manager of statistical programs for the Washington-based Aluminum Association, also observed this phenomenon. "Inventories were stripped bare. There was nothing left on the shelves at...

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