Kaiser provides outlook on aerospace, automotive

April 21, 2017 - Kaiser Aluminum, Foothill Ranch, California, expects that destocking in the commercial aerospace supply chain will continue through the remainder of 2017 as the supply chain adjusts to revised production forecasts for larger airframes.

“However, we consider the decline in 2017 demand to be a temporary moderation in the steady, long-term demand growth trajectory for our aerospace applications,” Chairman and CEO Jack A. Hockema says. “We expect to emerge from 2017 with strong

industry demand approaching 10 percent annual growth for these applications in both 2018 and 2019 driven by growing commercial aerospace builds, recovering growth for business jets, and solid growth for military aircraft.”

For automotive extrusion applications, Kaiser projects double-digit growth in shipments and 5 to 7 percent growth in value-added revenue as the mix shifts to lower value added parts, Hockema says.

“While we anticipate a 6 percent compound annual growth rate in aluminum extrusion content with build rates similar to the 2016 level for the three-year period 2017-2019, growing dealer inventories may impact forecasted build rates,” he says.

Although modernization of the Trentwood plant is impeding near-term results, the project will be completed near the end of the third quarter, so Kaiser expects to begin realizing the quality, cost and capacity benefits from it. Those benefits should continue well into the future “as we fully implement the improved practices and capacity expansion enabled by the equipment upgrades,” Hockema says.

[h/t Kaiser Aluminum]

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