Senior vp and supply chain officer Nick Madden said in written testimony to a US Senate hearing that the company was taking steps to rely more and more on scrap rather than primary aluminium, as a result of high premiums.
Madden explained the $6 billion by saying that metal premiums are at least $250 per tonne higher today than historical norms, and that world production of primary aluminium excluding China is about 25 million tpy.
“All new production earns the higher premiums and the cost is passed through the value chain. Thus, consumers are paying over $6 billion more than they would if normal market forces prevailed,” Madden said.
This does not take into account higher premiums payable on metal in storage that was produced in previous years, he added.
“We are taking steps to rely more and more on scrap rather than primary aluminium but the effect has carried through to scrap prices,...