February is our nonferrous-focus month, so this editorial will concentrate primarily on aluminum. With Alcoa’s end-of-year meeting so perfectly positioned, we’ll highlight some Alcoa news from this Jan. 8 gathering and pass along some other recent light-metal news.

    As Alcoa goes, so goes aluminum. Alcoa’s meeting seemed to contain some better news than last year, even though the bottom line for 2012 was down. Alcoa’s income in 2012 was $191 million compared to $614 million in 2011. The difference was primarily due to a 12% drop in the realized aluminum price, which equates to roughly $1 billion in market impact. Alcoa feels that the price of aluminum is essentially acting like a commodity and is following general economic trends. The 2013 saving grace was the $1.3 billion in productivity and overhead improvements, which helped the company to achieve a positive year-end (2012) bottom line. Alcoa’s fiscal is not calendar.

    Alcoa’s expectations for 2013 include a 7% demand growth for global aluminum, the same as was predicted last year for 2012. Aerospace grew at 13-14% in 2012, and 9-10% growth is expected in 2013. While budgetary uncertainty may affect aerospace-related spending, Alcoa’s CEO, Klaus Kleinfeld, indicated that there is an eight-year production backlog for aircraft. Growth in the automotive area was 16-17% in 2012, but a relatively flat 0-4% is expected in 2013. Kleinfeld made mention of the Saudi Arabia JV smelter, which saw its first hot metal on 12/12/12 and is expected to produce 250,000 tons.

    A recent news story indicated that Alcoa was awarded a long-term contract by Siemens to supply blades and vanes for a wide range of heavy-duty, industrial gas turbines. Siemens indicated that these “blades and vanes operate in the most demanding section of the turbine, where temperatures sometimes exceed the melting point of the casting and the rotational rate exceeds the speed of sound. Alcoa’s technology keeps the castings working optimally.”

    In December, it was also announced that Alcoa Wheel and Transportation opened a forged-wheel manufacturing plant in Suzhou, China. While these wheels have been marketed in the Chinese market for eight years, this is the first manufacturing plant located in country. Forgings will continue to be produced at one of four other facilities, including Cleveland, Ohio, and imported to China for machining and finishing.

    In November, Tesla’s all-aluminum Model S electric vehicle was named Automobile Magazine’s 2013 car of the year. Alcoa congratulated Tesla on their accomplishment. The Model S accelerates from 0 to 60 mph in 5.6 seconds. It was this performance that won over the folks at Automobile Magazine. Tesla is clearly far from mass production with the Model S, but everyone is hoping that this American-built, all-electric sports sedan is a success.

    In late October, General Motors reported that they are testing an industry-first thermal-forming (842˚F) process and proprietary corrosion-resistance treatment for lightweight magnesium sheet metal that will allow increased use of the high-strength alternative to steel and aluminum. Magnesium weighs 33% less than aluminum, 60% less than titanium and 75% less than steel. Light-weighting of vehicles is a key means of improving fuel economy. During testing, a production-ready magnesium rear trunk lid withstood 77,000 robotic slams and 550-pound drop impacts without issues.

    It appears that copper might have a good year in 2013. China consumes 40% of the world’s copper. As recently as last summer, there seemed to be extra supply there, which isn’t good for copper producers. By November, however, China set a monthly import record for the red metal. This is obviously good news for copper producers worldwide.

    The final thought for our nonferrous editorial involves recycling of aluminum. It’s a good thing that global aluminum demand is projected to be up by 7%, right? Growing demand indicates manufacturing and economic growth/activity. In October, an article written from the perspective of the greens studied the aluminum production cycle. They conclude that regardless of how much the industry recycles, they can’t reduce GHG emissions enough to meet 2050 reduction targets imposed by environmentalists. (As a reminder, the Obama administration supports the implementation of a market-based cap-and-trade program to spur growth in the low-carbon economy and reduce GHG emissions to 83% below 2005 levels by 2050.) Their ultimate conclusion is that the only way to reduce aluminum-industry emissions is to reduce production. And all of this is based on questionable, if not flawed, science.

    We hope our friends in the aluminum industry are taking note that no matter how green you try to become, environmentalists won’t be happy until your businesses contract. That’s certainly not good for the aluminum industry, for our economy or for consumers. IH



Reed Miller,

Associate Publisher/Editor