Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Ohio-based Metal Exchange Corporation has decided to retreat from the A380.1 and similar alloys market, favoring production of aluminum extrusions from primary billet. 


In conversation with Gary Stein, vice president, Foundry Division, at Metal Exchange, Davis Index learned that the company’s decision is based on secondary scrap prices being prone to market volatility, which is not always a profitable business. According to their website, Metal Exchange took over Pennex Aluminum in the early 1980s and through experience, believes that the primary billet market can be hedged to a large extent, ensuring healthy profit margins. 


Media reports indicated that the company will halt production of diecasting and deox alloys such as A380.1 and A356.1 at the Hudson plant (owned by subsidiary Continental Aluminum) to refocus its business strategy and retool the factory to produce cast aluminum billet and extrusions under the name MEC Cast Products. However, the exact timeline for this process remains unknown. 


Metal Exchange will now capitalize on the dearth of billet and extrusion products available in the market. The 6063 billet market has seen very little domestic production in the past six months, according to Davis Index estimates. Pennex produces billet at its Wellsville and Greenville facilities in Pennsylvania. It will use this raw material to ramp up production of extrusions at Leetonia and Hudson after the retooling. 


MEC Cast products will be headed by Mark Buchner, who was previously the president of Continental Aluminum. 

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