Steel Products Prices North America

CRU Aluminum: Apollo Management Group Set to Acquire Arconic
Written by Stephen Williamson
May 12, 2023
Private equity firm Apollo has been looking to add Arconic to its portfolio for some time. Almost since its spin-off from its upstream parent, Alcoa, in 2016, Arconic’s assets and key position in the aluminum semis value chain have been on Apollo’s radar. The deal is expected to close before the end of 2023, at $30 per share, nearly a 30% premium from when word of the acquisition circulated in February.
Arconic’s assets are storied, long-time cornerstones of North American aluminum semis manufacturing: rolled products, extrusions, and wire-rod-bar operations at Davenport, Iowa; Lancaster, Pa.; Knoxville, Tenn.; Lafayette, Ind., and Massena, New York, respectively. With established strategic supply chain relationships with aerospace, ground transportation, beverage can, consumer durable, and building products end-use segments, Arconic’s diverse portfolio looks to tap into the growth that CRU has forecast.
For the period 2022-2027, CRU models US flat-rolled products demand to increase by 1.428 million metric tonnes. Transportation applications, aerospace, automotive, truck, and truck trailer applications will draw 46% of that new demand. Beverage packaging will play a significant role in that demand growth, taking more than 30% of the expected growth in rolled-products consumption.
While Arconic is not a part of the new wave of US rolling mill investments that are set to begin production during this period, it does have an established position in these two key end-use segments, where product qualification and ramp-up are prolonged processes.
The $3-billion Apollo offering, and market momentum, seem a welcome match for Arconic’s aluminum operations’ history. Despite the near-term demand doldrums in beverage packaging and construction end-use applications, Arconic’s portfolio play affords some insulation from demand volatility. While nearby seasonal demand is still a question, the extended forecast for aluminum demand is squarely aligned with Arconic’s production capabilities and underpins the deal.
Learn more about CRU’s services at www.crugroup.com
By Stephen Williamson, CRU Research Manager, stephen.williamson@crugroup.com
Stephen Williamson
Read more from Stephen WilliamsonLatest in Steel Products Prices North America

Thin demand keeps plate prices hovering at lowest levels since February
Participants in the domestic plate market say spot prices appear to have hit the floor, and they continue to linger there. They say demand for steel remains thin, with plate products no exception.

SMU Price Ranges: HR crawls back to $800/ton
SMU’s HR price stands at $800/st on average, up $5/st from last week. The modest gain came as the low end of our range firmed, and despite the high end of our range declining slightly.

SMU successfully completes IOSCO review
SMU has successfully completed an external review of all our prices. The review has concluded that they algin with principles set by the International Organization of Securities Commissions (IOSCO).

Domestic plate prices could heat up despite so-so demand, market sources say
Some sources also speculated that plate could see further price increases thanks to modest but steady demand, lower imports, mill maintenance outages, and end markets less immediately affected by tariff-related disruptions.

SMU Price Ranges: HR holds, galv slips amid competing market narratives
SMU’s sheet and plate prices see-sawed this week as hot-rolled (HR) coil prices held their ground while prices for galvanized product slipped.