Construction slowdown cuts aluminum extrusion buys

By Tom Stundza -- Purchasing, 3/26/2008 9:36:00 AM

The Aluminum Association says shipments of extruded products by U.S. and Canadian mills to domestic and foreign customers recorded a year-over-year decline of 15.7% to 3.95 billion lb in 2007. Purchases of extrusions from North American and foreign mills totaled 3.52 billion lb, a 10.5% decline. Looking ahead, aluminum extrusion purchasing this year will decline another 3.7% to 3.39 billion lb, forecasts analyst Lloyd O’Carroll in a Davenport & Co. Equity Research report. The last time extrusion purchases were in the 3.39 billion lb region came in the 2001-2002 construction slowdown.

With the construction market expected to be down 8.7% this year, “those extruders who are heavily construction oriented are feeling the pinch the most,” says O’Carroll, who adds that “it’s very difficult for them to see the light at the end of the tunnel (since) the housing market is only getting worse.”