According to a press release issued yesterday, aluminum manufacturer Alcoa's
The Jamalco plant, a joint venture between Alcoa and the government of Jamaica, had to be shut down during the storm, but it is slowly getting back up to full production, which the company expects to achieve within the next few days. The problem is not with the plant itself. The problem is with shipping the plant's production off the island -- the port that Alcoa uses was damaged in the storm.
Between the minor hiccup in production of aluminum from the 1.25-million-metric-ton plant and the likely delays in shipment necessitated by repairs to the port, Alcoa announced on Tuesday that it intends to declare Ivan a "force majeure." This will excuse the company from any contract breaches resulting from its deliveries being held up.
Thus, the implications of Jamalco's shutdown will probably be not all that great for Alcoa itself -- but they may be for its customers. Consider that in its April conference call, Reliance Steel & Aluminum
This has implications not just for aluminum consumers -- mainly businesses -- but for their customers in turn. A recent article in The Wall Street Journal told how manufacturers of various high-end kitchen appliances -- stainless steel-faced appliances in particular -- were having to hike prices because of the high cost of steel. One alternative these manufacturers have been experimenting with in an attempt to keep their wares affordable is using cheaper materials such as aluminum rather than stainless steel.
Oh well. It seemed like a good idea at the time.
For more Foolish news and commentary on Alcoa, read:
- Energy Crisis Spurs Outsourcing, by Rich Smith
- Beer Shows Its "Metal," by Dave Marino-Nachison
- Has Alcoa Reached Its Peak? by Roger Nusbaum
Fool contributor Rich Smith owns no interest in any of the companies mentioned in this article.