How do aluminum prices come into play as a factor in the merger process?
The price creates an opportunity. The overinvestment phenomenon leads to periods of depressed aluminum pricing. The volatility of pricing creates an opportunity where assets trade at a value that’s below what you would expect their long-term cash flow generation would be. That creates an opportunity for people to buy assets. It also has to do with the markets. People were saying these are bad investments and were refusing to invest in these companies, which focused managements’ attention on what they need to do to change that perception. Q: Do you expect aluminum prices to rebound? A: Right now we have prices at 65 cents a pound. We expect them to average 67 cents next year and 71 cents in 2001. We think that 70 cents a pound is a reasonable long-term number. Right now, we’re below where the price needs to be to prompt sufficient investment in the industry to keep up with rising demand. Aluminum prices got very depressed in the early 1990s, down to the low 40s. There was a structural c
