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All's quiet on the nonferrous front: aluminum mills and distributors face an uncertain outlook for 2009 as the worldwide financial crisis threatens to filter down to industrial manufacturing.

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AN UNCOMFORTABLE QUIET has settled over the aluminum industry. Plummeting prices, downtrodden end-use markets and the uncertainty surrounding the overall domestic economy have created a period of general inactivity throughout the nonferrous world. Descriptions of the market range from bad to worse.

"Things were going along very nicely up until early August and then it got very quiet, and the climate continues to be quiet," says one aluminum distributor from the Northeast describing business activity.

"It will be a while before we come out of this thing," says Jeff Knapton, vice president of marketing for aluminum extrusion manufacturer Indalex, Lincolnshire, Ill. "It's affecting everyone. It doesn't matter if you're a distributor or an extruder."

Buddy Stemple, vice president of specialty products for Novelis, Atlanta, says flatly, "I can't give you one optimistic thing that's happening in any of our markets'

Not every member of the sector is that bearish, but rosy outlooks are in short supply. Even service centers that have thus far eluded the slowdown are proceeding cautiously.

"We keep hearing the sky is falling. We've got our umbrellas out, but nobody's got them open yet," says Bill Sales, senior vice president for nonferrous operations at Reliance Steel & Aluminum Co., Los Angeles. "Our business levels are holding up fairly well. But the outlook for 2009 is pretty cloudy right now. We're planning for the worst and hoping for the best."

Reliance is not a big player in two of the worst performing metals markets, residential construction and automotive, which gives the company some immunity to the slowdown, Sales notes. "We're not in some of the markets that have been negatively impacted. But we don't have our heads in the sand thinking there aren't people going through tough times."

Moreover, those end markets trending negative aren't expected to reverse course anytime soon.

Industry projections for the North American light truck and automotive build, initially forecast at up to 13 million, have been lowered by some analysts to 11.9 million. That's a decline of more than 25 percent from the 16 million produced just two years earlier.

September's Davenport Quarterly Aluminum Outlook, prepared by Davenport & Co. Senior Vice President of Research Lloyd O'Carroll, has revised projections...

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