Is there a demographic or societal change happening on the demand side of the aluminum equation?
There are a number of important changes. The most important one is regulatory, where auto companies are under enormous pressure to reduce the weight of cars in order to meet corporate average fuel economy standards. One of the ways you do that is to substitute lighter-weight materials for heavier materials. There’s a lot of debate over how far that process will go, but over the past five years we’ve seen aluminum demand grow at 6% a year and we think that will continue. There are some who expect to see a manufacturing shift in the auto industry from steel to aluminum where the frame is made of aluminum. I don’t see that happening, but I do think that aluminum will displace steel in certain parts of the car, and that will drive up demand for aluminum. There has been a big change in packaging from steel to aluminum cans, but that has already run its course. Q: How many aluminum companies will there be? Will we be left with only a few super-companies with no room left for a small player?
