Aluminum Extruders Council annual meeting highlights

Some key takeaways:

• Concern that further curtailments may be coming in the Persian Gulf, as no one sees a solution for transiting alumina into the region. The next two to three weeks will be a crucial decision window.
• Gulf producers were unevenly represented. Emirates Global Aluminium of the United Arab Emirates had a strong contingent, and multiple sources indicated that it has given customers firm assurances that contracts are covered through May. It was widely discussed EGA is developing alternative overland routes to move metal through the Gulf of Oman ports, and that a vessel was planned around April 10.
• Aluminum Bahrain was not in attendance, nor was Ma’aden (Saudi Arabia), Sohar (Oman) and Qatar (although one could argue that Hydro USA served as proxy).
• India’s Vedanta was present and drew significant attention as a potential replacement for missing Gulf tonnage. However, Vedanta representatives tempered expectations of providing materially higher volumes. Most of its incremental 2026 production is already committed to long-term contracts. And its new casthouse will not be ready until later in 2026. As a result, discretionary tonnage available to the market is limited.
• Canadian production, represented by Alcoa and Rio Tinto, were well represented and indicated that buying interest was picking up. Alcoa’s CFO Molly Beerman confirmed this in remarks at the JP Morgan 2026 Industrials Conference on March 17. Compliance issues have kept both parties closely focused on value-added product upcharges, but it was clear that numbers are being pushed higher.
• Secondary billet producers have rotated from tolling to buy/sell models, where they can take advantage of the significant scrap discounts and sell billet into the market.
• There was little discussion around what tolling fees for 2027 could reach, although some casual comments suggested that a $1.00 toll was “not out of the question,” given the large discount for extrusion-type scraps. Skeptics noted there is no assurance scrap will remain this discounted into next year, and questioned price increases of that magnitude. However, scrap is currently cheap enough that some traders are considering carrying materials into next year, as discounts are wide enough to cover financing with or without contango.
• The consensus was US stocks are very low, possibly dipping under 200,000 tons. There is a sense that Canadian shipments are picking up, and expectations recent large cancelations of LME warrants in Malaysia are earmarked for shipment into the US.
• Interest in second-quarter billet was picking up, with some extruders confirmed to have secured some tonnage as a hedge against Gulf supply risk. Nominal price increases of $0.02-$0.03 per pound were indicated, placing billet at a $0.15-$0.17 premium over the Midwest transaction price.
• There were many questions about whether the Gulf situation might prompt the Trump administration to consider granting Canada some exemption under Section 232. My comments during the panel discussion were that this was highly unlikely, given that the prevailing premium already provides sufficient incentive for Canada to supply more.
• Working capital came up frequently, with discussions centered on the large amounts of money tied up in inventory and receivables. We did not hear of anyone struggling significantly on this front.
• Speculation is growing that the Russians could return to the market and be allowed to trade again, particularly following recent precedents in oil markets.
• There was only limited discussion of demand destruction as a result of higher aluminum prices. Some extruders reported demand drying up in certain profiles, while others said conditions were holding up OK. Extruders active in distribution described business as strong, though some questioned whether recent new order data accurately reflects on-the-ground conditions.
• The inability to move alumina into the Gulf is already having a domino effect on spot alumina pricing, as reflected in the Alumina Price Index, with prices falling below $300 free-on-board (FOB). China would be the logical destination for some Australian spot cargoes, although China remains largely self-sufficient.

Why this matters

Non-casting extruders were cautiously exploring options to hedge against their reliance on Middle East imports. Casting extruders, by contrast, are benefiting from favorable economics tied to producing their own billet and capturing scrap discounts.

There remains a broader concern high aluminum prices, along with the secondary effects of soaring oil prices, could weigh on demand. Extruders with heavier exposure to automotive are particularly focused on steel’s competitiveness.

Given the wide range of end markets served, extrusion activity remains a useful bellwether for overall industrial demand.