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Anyone here remember me?

thanks y'all. Good to be back, I missed you guys.
Especially at Christmas, I have a big box of junk, I mean nice stuff I wanted to send someone!
 
tarafied1 said:
well, it's a long story. We are a global company but we do not have any aluminum raw material links to China. In fact we are more of a "converter" of aluminum. There are competitors of ours in China. In Brazil we already had a situation where we are the only aluminum producer and the Brazilian gov has tariffs in imported metal so it has protected us in South America. In our businesses in the US it has also been a good thing in some cases. We were under threat of imported metal from China on the West Coast because they were selling metal at a loss (cheaper the the LME prices) and shipping on a boat is cheaper than rail or truck from the MidWest so we were losing a lot of contracts. One benefit for us even without the tariffs is that the Chinese have to make a lot of product to fill a container ship and then get a warehouse to put it in when it arrives so we can still respond much quicker with any changes or fixing any quality issues but when the Chinese undercut the price so much they hurt the whole industry because they flood the market with cheap aluminum. That drives the prices so low we can hardly make a profit. End result (even with tariffs) we have had to shift our focus to higher profit margin products (like Automotive and Aerospace). This unfortunately hurts consumers because there is less aluminum available for things like beer cans which drives up packaging costs to companies like Coke and Anheuser Busch. Which of course they pass along to the consumer. So the tariffs are helping keep the influx of cheap Chinese metal from driving the market into bankruptcy. Prior to the tariffs, our customers were closing plants, there was a surplus of aluminum and prices were were very low. Now, some of our customers have announced they are building new plants. One of which will be here in Bowling Green KY! Our company is also building a new facility just outside of Russellville (close to Clarksville TN but in KY). So as long as the tariffs are in place the aluminum industry as a whole is doing pretty well. Auto is in a slump because consumers aren't buying a lot of cars so our shift to auto in an attempt to stay profitable was not going to save us. Airlines have cut back on buying new planes so that hurt too. 60% of our business in packaging which the Chinese were really screwing up. We have always supplied "specialty" which is things like computer cases, phone parts, appliances and so on but that business isn't really profitable. Building products remains flat but we have a big portion of that. Our deals with Ford for the F150 and the Super Duty have really been good for us and we are expanding into lots of other carmakers parts. Even GM who makes fun of aluminum is making a lot more parts of cars out of aluminum so even though car sales are slow, the use of aluminum in cars is increasing. The tariffs help protect from the Chinese flooding that market as well. Right now aluminum for auto is much more complicated and involved to make than for a beer can so the Chinese don't have the expertise to do it yet but with tariffs discouraging them from trying to get into the auto market it will slow their efforts to try and get that expertise. The Chinese are rich in raw materials and bought up a lot of the worlds scrap. They pay their people virtually nothing and sell at a loss just for cash flow and to keep their people busy. We cannot compete with that. In addition, we have seen companies that do buy cheap Chinese aluminum don't lower their prices any so they do make a little more profit but the Chinese do not "service" the industry so when companies have quality problems they get no support, no returns for bad quality and productivity goes down due to quality issue. The Chinese are getting better but still not at the quality the top teir producer are. So the old saying is still true, you get what you pay for!
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Hi Craig. Chris here. New. Do you work for Kobe or Kobelco? I spent 25 year managing in an aluminum, permanent mold foundry in Butler, IN. I bought our metal for many years. Long time since I saw LME in a paragraph. We purchased a lot of prime, alloys and also various grades of scrap. At one time we had 13 reverb furnaces producing 6 different alloys at one time. Had so much fun hedging against the various indexes our casting selling prices were based on. There were many years we made more money on metal than we did on selling the castings. Plant closed 11 years ago. I work in the fastener industry now. Much easier, safer and cleaner!
 
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