Bright Metal

Reynolds Metals Co. boosted its primary production of aluminum to 100% of rated annual capacity (601,000 tons) last week, and said: "We're selling aluminum as fast as we can make it." Production at Aluminum Co. of America and Kaiser Aluminum & Chemical Corp. was also rising, bringing the industry to 90% of its 2,300,000 tons primary capacity. Preliminary figures indicate that May production hit an alltime monthly high of 164,000 tons, and makers are confident that 1959 will be a record year, about 20% over 1958.

Most encouraging to aluminum producers is that demand is not based merely on the business recovery, nor is it the result of hedging against the July 31 deadline when most of the industry's labor contracts expire. It is based largely on new applications. The uses of aluminum by the housing industry are expected to increase this year by more than 50% over 1958. The 1959 car uses about 52 Ibs. of aluminum for brakes, pistons, automatic transmission parts and trim (v. 47 Ibs. last year). By 1962, predicts D. A. Rhoades, general manager of Kaiser Aluminum, the auto industry's use of aluminum will be up 300%, to 500.000 tons a year for engines, wheels, bumpers and radiators.

Most obvious upsurge in aluminum is consumer packaging, where the metal is being used for aerosol cans, carrying-cases for soft drinks, keeping beer cool (an aluminum foil laminated can) and covering detergent boxes. Alcoa predicts that aluminum packaging applications, which accounted for 227 million Ibs. last year, will grow to 400 million Ibs. by 1963.

Versatile aluminum is being tested, Alcoa announced last week, as a replacement for bronze bearings in the wheels of railroad cars; aluminum runs 20% cooler than bronze. A market for aluminum power-transmission towers is also developing.

While the new uses of aluminum will bring record production and sales this year, it is unlikely that earnings will follow--even though the stocks of aluminum companies have hopefully risen to the year's high. Producers say that the price of aluminum at 24.7-c-a Ib. is too low. Although a price rise is expected later this year, it will not come until the steel industry contracts are signed, since aluminum traditionally follows the labor patterns set by steel. For the long range, makers hope to increase demand not only at home but by developing world markets. In Western Europe and Canada percapita consumption of aluminum is only 6.2 Ibs. a year v. 21 Ibs. in the U.S. Says Reynolds' President R. S. Reynolds Jr.: "International markets will be the next scene of dramatic aluminum growth."

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