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might not be in balance until late this year or early in 2017. As the manufacturing sector softened in the second half under the weight of the strong U.S. dollar and weakening global economies, bringing freight rates down with it, Hayes says it resulted in there being more trucks than were needed to move that freight. On the other hand, there continues to be pent up demand for truck trailers, Pell maintains. While such demand has recently been flattening out, he says backlogs are sufficient to continue to prop up demand at least through the first half of this year. Hayes says that pending legislation would allow the use of longer pup trailers, the small trailers often used when trucks haul tandem loads, could bolster trailer demand. Currently pup trailers are limited to being 28 feet in length. The legislation would allow pup trailers up to 33 feet long. Construction The construction market should continue to be a good contributor to 2016 extrusions demand, Hayes says, given that housing construction continues to shine at the same time as the nonresidential sector shows some signs of improvement, although that might be moderating. After rising about 10% last year, Doge Data & Analytics reports that the value of new nonresidential starts retreated slightly from December to January. Year on year overall starts were up 6% with residential building up 15%, nonresidential building down 7% and non-building construction up 11%. An increasing number of buildings are being built to “green” standards, Brown says, which is a plus for extrusions use given that new environmental regulations including Leadership in Energy and Environmental Design (LEED) and Energy Star have been supportive of greater use of sun shades and louvres – both of which use extruded parts – as a way of controlling energy use. Jeffrey Henderson, its director of operations, says the Aluminum Extruders Council will release the environmental product descriptions for extrusions required by LEED v4 later this year. Energy It is also hoped that now the alternative energy investment tax credits have been extended, it will result in increased demand for extrusions for solar panels, but that remains uncertain. Schabel says our business saw a 10% increase from the solar sector in 2015, partly due to projects being pulled forward with consumers fearing that the tax credits wouldn’t be renewed. He, however, is optimistic 2016 demand will be at least flat vs. the bubble Aluminium International Today

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that was originally anticipated. The Solar Energy Industries Association reports that a record 7,286 megawatts of solar photovoltaics were installed last year including a 66% increase in residential installations. Utility scale installations were up 6% while nonresidential projects were flat year-on-year. Demand One question, however, is how much extruders will benefit from future demand, given that panels could use either aluminium extrusions or galvanised steel, Pell admits. While galvanised steel carries a cost advantage, aluminium extrusions are lighter and, therefore, result in the panel having less stress upon the roof. Also there has been increased use of extrusions for LED lighting and industrial automation. There also has been some substitution displacing copper in certain electrical applications, Henderson observes. With demand picking up, domestic extrusion capacity has tightened, although it varies by the end market that the extruder serves. Some lead times remain only four to six weeks, while others, including at companies serving the auto industry, are further out. Because of this about a dozen new presses have come on line in the past year or so. Also a number of extruders upgraded current capacity, including fabrication capacity, to increase their efficiency. Billet availability hasn’t been a big concern, according to Schabel. While North American supply has become somewhat limited, he says more billet is coming in from overseas. He believes that with subsidies from their government, Chinese billet prices have fallen. Also, due to their use of natural forms of power, billet prices from the Middle East and Iceland are also being offered at lower

prices than certain less efficient North American plants. Future Given the anti-dumping and countervailing duties imposed against Chinese extrusions coming in to the United States, U.S. imports are significantly lower than they were 10 years ago, Henderson admits, however the industry is concerned about recent reports of circumvention and transshipments. “We have seen data that indicates that extrusions are being dumped by China Zhongwang Holdings into Mexico and of aluminium pallets being shipped to southern California. According to a report by Dupre Analytics, these ‘fake semis’ are just welded together extrusions,” he says. “This needs to come to a head,” Henderson says. “We are disappointed that Commerce Department continues to delay their decision to investigate this.” Originally it was to decide whether to launch an investigation by the end of 2015, but on Feb. 22 once again delayed their decision. The new signature date is now scheduled for March 12. “As a whole this alleged circumvention of duties hasn’t had a big impact upon the market,” Hayes says. Several North American extruders have been able to successfully raise their selling prices for 2016 by 3-4 cents per pound. “Contract prices have also, on average, gone up. Volumes, while flattening, are still high,” Pell says. But while extruders’ margins are better than they had been when the market turned down from 2009-12, MBR’s Buchanan says they are not as good as during their 2006 peak. “But they are happy that with this ‘new normal’ they can at least cover their costs, helped by some new technologies including those that allow them to make thinner walled extrusions.” t March/April 2016

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Aluminium International Today March/April 2016  
Aluminium International Today March/April 2016