Contained Metal
Kaiser Aluminum announces a change in the pricing methodology of the metal component for all products. This methodology change will impact all products, agreements and contracts where a discrete metal value or values (metal pass through, metal band and firm metal contracts) are identified as part of the price. This new contained metal methodology will be effective for all existing and new orders shipping on or after December 1st, 2021.
The metal component used as part of the price will be calculated based upon the compositional weight of the major alloying elements multiplied by the per pound price of the appropriate index with the resulting totals summed to the nearest tenth of one cent per pound ($0.001/LB).
| An example of the elements used in alloy 6061, and their corresponding indexes, is shown below for illustrative purposes: | ||||
|---|---|---|---|---|
| 6061 Alloy Elements | Index | Content | ||
| Aluminum | Platts US Midwest Transaction | 98.12% | ||
| Copper | Comex 1st Position High Grade (HG) | 0.28% | ||
| Magnesium | Platts US Spot Western | 1.00% | ||
| Silicon | Platts 553 Grade Del US Midwest | 0.60% | ||
| 100% | ||||
| Continuing with the example of alloy 6061, the below chart shows the change in methodology, comparing September 2021 to October 2021: | |||||
|---|---|---|---|---|---|
| September 2021 | October 2021 | ||||
| 6061 Alloy Elements | Index Price | Contained Metal | Index Price | Contained Metal | Monthly Adjustment |
| Aluminum | $1.635 | $1.604 | $1.687 | $1.655 | $0.051 |
| Copper | $4.229 | $0.012 | $4.436 | $0.012 | – |
| Magnesium | $4.436 | $0.044 | $7.375 | $0.074 | $0.030 |
| Silicon | $1.806 | $0.011 | $3.738 | $0.022 | $0.011 |
| $1.671 | $1.764 | $0.092 | |||