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 Petersen, Southwood: A Modest Uptick AheadAluminum markets are likely to rebound modestly in the months ahead. But relatively weak underlying fundamentals indicate that it is likely to be some time before they return to the heights of several years ago.
That was the consensus of speakers Michael Petersen, President of Petersen Aluminum, and Jim Southwood, President of CRU Price Risk Management, who gave their market analyses at the Annual Business Meeting of the Aluminum Association Annual Meeting October 20 at the Hotel Palomar in Arlington, Virginia. Commenting on the aluminum market, Petersen said, "The third quarter will be better - if only because of inventory replenishment." This should allow a return to what he called "break-even profitability." Nonetheless, a number of factors loom that threaten to increase the cost of doing business, Petersen added. These include budget deficits, healthcare reform, and climate legislation. Regarding global industrial production, Jim Southwood said, "We've seen the bottom, and things are getting better." He added that he did not expect there to be a double-dip recession.
As to North American primary aluminum consumption, Southwood predicted 11.7 percent growth in 2010 over the current year. Despite this improved outlook, he noted that such gains would amount to only a fairly modest rebound - considering consumption for 2009 is already down 20 percent from last year. Hampering prospects for a more significant rebound in aluminum markets, Southwood said, is the uncertain outlook in the construction and auto markets. To view/download Southwood's presentation, click here. |
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