This is part four of our interview series on the state of the aluminum market, and the opportunities for producers and consumers. You can view the entire series here.
The first three parts of our aluminum series focused in-part on demand for aluminum — from the increasing levels needed by the auto industry to the more traditional needs of a beer company. Andy Massey of Bonnell Aluminum, based in Newnan, Georgia, has another demand driver to add to the list.
“The last two or three years business has been fantastic…. I see aluminum as a choice mainly for architectural business, for insulation purposes, and for looks because nowadays people are looking for more fancy-looking buildings, more color, more pizzazz, and the demand for aluminum continues to increase because of that.”
Bonnell is one of the top U.S. firms for aluminum extrusions, which means they produce the exteriors for commercial buildings, walkways, hurricane protection, light trucks and industrial machinery, among other things. When the demand for aluminum changes, Bonnell feels it and has a need the manage the price risks associated with what Massey acknowledges is “a cyclical business. It comes up and it comes down, not just on the trading of prices, but on demand.”
But like other aluminum hedgers we’ve interviewed, Massey says his company was affected this year by the rise in the Midwest premium for aluminum, which currently sits near .20/lb. (Massey says it should be about .08/lb.). That’s made the metal difficult to hedge, and made aluminum consumers and producers like Bonnell open to using a new contract launched by CME Group earlier this year.
Massey talks about that contract, and where he sees the aluminum business going in the video above.
Read More From Our Aluminum Series :
Why the Market for Aluminum is Looking Brighter
How MillerCoors Addresses Aluminum Price Risk
Rusal’s Hodgson on Aluminum Hedging
