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Higher Aluminum Prices Could Affect More Than Wheel Makers: MEMA

(Akron/Tire Review) According to the Motor and Equipment Manufacturers Association (MEMA), aluminum prices are increasing dramatically and will be nearly double those of 2002 by the end of this year if 2005 price growth repeats.

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Based on annual averages, mean daily price volatility has increased from 2.31% in 2002 to 6.93% in 2005.

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“Since 2002, the increase in aluminum prices has been the source of bumps in the road for major and minor manufacturers alike, including issues with Chevrolet Corvette wheels most recently,” said Richard Anderson, MEMA’s senior market research analyst. “Looking to the future, though, should aluminum prices continue to increase, problems will not be limited to wheel manufacturers. Many of today’s manufacturers use aluminum for motor components like the engine block, heads and more. In addition, brake calipers, entire suspensions and even bodies/chassis components themselves could suffer from increased aluminum pricing.”

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Demand for recycled aluminum could increase, but even that material is under price pressure, Anderson noted.

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