Why Is Constellium increasing prices for flat-rolled aluminium products?

Constellium, the Paris-based aluminium business, has determined to increase a minimum price of USD 0.15 per pound for all flat-rolled products shipped in the US, owing to the recent market conditions and revolving economic drivers. The price increase is to be effective immediately after announcements, as per the contracts’ appropriation. As a result, select products may require higher increases. 

The global manufacturer of aluminium rolled products, extruded products, and structural parts based on a large variety of advanced alloys counts close to 12,500 employees worldwide and operates more than 28 manufacturing sites in North America, Europe and Asia. It also holds a research and development unit in China.

In a recently conducted survey, unforeseen consumer demand, elevated trade apprehensions, and unstable supply chains were among the most worrying reports from the 579 retail, consumer packaged goods, and wholesale business managers in seven countries.

“Businesses are moving beyond crisis-driven decision-making and taking proactive steps to fortify their supply chains against the next wave of economic, regulatory, and geopolitical challenges,” the report said.

With global trade becoming more unpredictable, 60 per cent of companies are fundamentally restructuring their supply chains to stay ahead of economic uncertainty, according to a survey by retail supply chain manager Relex Solutions and survey firm Researchscape.

President Trump’s planned 25 per cent tariffs on steel and aluminium imports, including on trade partners previously exempted, are expected to have a limited direct impact on the US economy, according to analysts.

The tariffs are not currently factored into the baseline US economic forecast, but early estimates suggest any effect on consumer prices and GDP would be less than 0.1 percentage points.

However, the analysts have hitherto warned that if the tariffs escalate into a broader trade war, the economic consequences could be more severe, leading to a downward revision of macroeconomic projections.

While the tariffs should provide a boost to domestic steel and aluminium industries, concerns about price hikes, such as in the case of Constellium, are lingering about knock-on adverse effects on downstream users of these metals, such as automakers, can manufacturers, packaging firms and construction projects.

Meanwhile, in the past six months, Constellium’s stock has decreased by 40.6 per cent. Whereas, in the last two quarters, revenue has decreased by 9.2 per cent per quarter. And, in the last two quarters, net profit has decreased by 97.2 per cent per quarter.