Aluminum extrusion shipments have nosedived

By Tom Stundza -- Purchasing, 5/14/2008 9:44:00 AM

Purchasing of aluminum extrusions has withered in the building and construction, transportation, and engineered products markets, and may not recover until 2009, especially if analysts are correct that residential construction won’t rebound until sometime next year.

The Aluminum Association says shipments of aluminum extruded products of 294 million lb in March were down 12.1% from March 2007. Three-month shipments of 880 million lb are off 7.3% from the year-to-date 2007 total of 949.3 million. Association data shows that new-order shipments through March are flat for the extruded products and tubing category but dropped 3.5% in March from the previous month.

“The aluminum extrusions industry in the U.S. continues to suffer from a cyclical downturn,” says John D. Gottwald, CEO of Tredegar Industries, a major producer, in a first quarter earnings report. The Richmond, Va.-based company says first quarter shipments of extrusions dropped by 12.5% in the first quarter of 2008 compared with the first quarter of last year, “with demand down in most market segments.” Extrusions are sold.

Gottwald says the decreases in net sales and ongoing operating profit from continuing aluminum extrusion operations in the first quarter of 2008 compared with the first quarter of last year were mainly due to lower volume. Still, since 65% of U.S. sales of aluminum extrusions are related to non-residential construction, Tredegar is spending $24 million over the next 18 months to expand the capacity at its plant in Carthage, Tenn., too boost future capacity to service that sector when demand perks up.