Platts reported that Superior Aluminum Alloys has curtailed a furnace at its Indiana secondary alloy plant, bringing its total output to 50% of capacity.

An official of Superior said that it is now running two of its four furnaces or 11 million pounds per month of alloys. Its four furnaces have a capacity to produce 22 million pounds per month to 23 million pounds per month. Superior had been running at 100% of capacity in 2006 and 2007, but shut down one furnace as business waned. It operated three furnaces from 2008 to the present.

He added that "It's a lack of demand. If we need it, we can run it. We are seeing some signs of some economic improvement, we are seeing some spotty areas, but that has not translated into the auto builds schedule yet. But ultimately it will."

The Superior official said that in 2008, about 70% of its alloy sales were under contract, leaving 30% in the open market. He added that "In 2009, all those contact buyers are taking less, but they are still talking metal spot business is tough."

It may be noted that demand in the automotive sector is seeing steep declines in the US. General Motors reported a 53% slide in February sales, Ford sales fell 48% and Chrysler's 44%. Toyota's February sales dropped 37% from a year earlier. Overall, sales for the US market were down 41% from a year ago to a weak annual pace of 9.12 million vehicles. That is down from sales of 16 million units in 2007.

(Sourced from www.platts.com)