NADCA submits testimony on aluminum pricing and supply.
Press Release Summary:
January 23, 2014 - NADCA submitted formal testimony to Senate Banking Subcommittee on Financial Institutions and Consumer Protection for the hearing titled, "Regulating Financial Holding Companies and Physical Commodities." This is the second Senate hearing investigating ownership of metals warehouses by banks and holding companies and their relationship with the London Metals Exchange. NADCA applauds Committee for looking into possible market manipulation which impacts everything from autos to toys to airplanes.
Original Press Release
NADCA Submits Testimony to Senate Committee on Aluminum Pricing and Supply
Press release date: January 16, 2014
Washington, D.C. - On January 15, 2014, the North American Die Casting Association (NADCA) submitted formal testimony to the Senate Banking Subcommittee on Financial Institutions and Consumer Protection for the hearing titled, “Regulating Financial Holding Companies and Physical Commodities.” This is the second Senate hearing investigating ownership of metals warehouses by banks and holding companies and their relationship with the London Metals Exchange (LME).
“This is an important issue which warrants significant public and regulatory scrutiny,” said NADCA President Dan Twarog. “We applaud the Committee for looking into possible market manipulation which impacts everything from autos to toys to airplanes.”
Aluminum is one of the metals central to the warehousing investigations. Total automotive aluminum die casting content is expected to grow from 114 pounds per vehicle in 2012 to over 143 pounds in 2020. Globally, aluminum consumption will increase from 58 million metric tons in 2015 to nearly 120 million by 2025.
In February 2013, according to data from the LME, the queue to remove metal from warehouses they oversee in Detroit reached 400 days. In June 2013, some users reported 16-month wait times for aluminum from order to delivery.
“Long lead times, supply shortages, outmoded contract terms, and illogical pricing contribute to instability in the aluminum market. This drives down manufacturing productivity and encourages customers to seek overseas suppliers,” said Mr. Twarog.
In May 2013, NADCA met with representatives of the LME to discuss concerns over wait times, among other issues, with the North American Special Aluminum Alloy Contract (NASAAC). The Association considered withdrawing its support of the NASAAC and remains concerned about terms applied to aluminum contracts.
Founded in 1989, NADCA represents more than 300 die casters in the U.S. Part of an industry with roughly 50,000 employees; the typical NADCA member has annual sales around $30 million with 150 full-time workers. The industry has facilities in roughly forty states manufacturing products for the agriculture, aerospace, automotive, defense, energy, medical, and other industries that serve as the backbone of our nation’s security and economy.