Will ingot prices remain erratic?
By Tom Stundza -- Purchasing, 10/7/1999
Primary aluminum is an internationally traded commodity. The price of primary ingot is subject to worldwide market forces of supply and demand by fabricators and their downstream customers and such other influences as speculative-investor interest. Prices, therefore, can be volatile. Some analysts worry that aluminum consumers may find the pricing of material even more challenging because of recent major merger and takeover announcements, which will put production into fewer and perhaps less cost-flexible hands. However, other mavens say the newer, larger producers may be more inclined to offer aluminum users longer-term deals at fixed prices, which would protect both end users and smelters from future price volatility.Market insiders say that as the number of producers shrinks and the size and influence of remaining firms increases, more deals may be done on a producer-based price, which will help smelters maintain market share. This will ensure better price stability than in the past for consumers, processors of mill products, and end-use buyers.
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