Alcan to up 6063 aluminum extrusion billet base price by 2 cents

Tag : aluminum
Rio Tinto Alcan is increasing its base price for 6063 aluminumextrusion billet by 2 cents/lb on new business placed for shipment on orafter October 1, it said in a customer letter obtained by Platts. In addition, Rio Tinto Alcan has decided "to maintainunchanged our standard terms of payment for the time being" at net 30-daypayment. Alcan and Alcoa in 1999 shifted to net 30-day payment terms for billet fromnet 60. The company said it recognizes "the current challenging economicenvironment" and said, "We will be vigilant in seeking to ensure that ourreceivables performance matches the terms of payment agreed with ourcustomers." Rio Tinto Alcan explained that it is trying to keep pace with unprecedented rising costs associated with the production ofextrusion billet. All contractual obligations will be honored as per existingagreements. According to the letter, the cap on its current energysurcharge will be 1 cents/lb, although increasing to 1.5 cents, effective January 1,2009. "Additionally, adjustments to a limited number of other billetalloy premiums will be made," said the letter. "Over the last decade we haveworked in a responsible manner to control costs in a way that minimized anysignificant burden to our valued customers. However, recent inputs and rawmaterials required to produce and ship extrusion billet have exceeded ourability to absorb these costs on a continued basis." Alcoa Materials Management in August raised primary aluminumbillet alloy premiums by 20%, in response to cost increases in alloying agentsand energy and logistics costs. For more news, request a free trial to Platts Metals Week at http://www.platts.com/Request%20More%20Information/index.xml?src=story or subscribe now at http://getmetalsweek.platts.com