Reuters reported that the US primary aluminum market is seeing a surprisingly strong burst in spot purchases at the start of the quarter with supplier order books filling up even as volatile financial markets dispel recovery hopes.
The demand pickup has caught physical market players by surprise many of whom expected the seasonally slower Q4 to close out 2011 with a whimper. So far it is shaping up to be a busier than normal quarter.
One Midwest aluminum manufacturer and distributor said that “For the next couple of months, we are basically sold out. The automotive sector is good, heavy truck is good, the rail industry is busy the casting side of the business is actually pretty busy.”
A similar upbeat market view came from Alcoa Inc‘s chief executive earlier this month, after the largest US aluminum producer reported higher third quarter net income and revenue from a year ago. Even so, customers have been limiting their risk by operating on a hand to mouth basis in order to avoid being caught with too much inventory at year’s end if economic conditions take a turn for the worse or international aluminum prices deteriorate further.