OPENING STATEMENT BY WILLIAM LILLEY III AT PRESS CONFERENCE ON ALUMINUM PRICES

by William Lilley on September 27, 1976
by William Lilley

The Council is releasing today its staff report on aluminum prices behavior in 1974-75. This report represents the culmination of 20 months of study of the flexibility of prices of primary aluminum and aluminum mill products during a period of economic recession and the beginning of recovery from that recession. During the past year and one-half, the Council staff has focused much of its effort upon examining the downward flexibility of prices in the face of falling demand, releasing reports on the prices of steel, coal, antifreeze, autos, and chlorine during the recession of 1974-75.

The aluminum study being released today does not analyze price behavior during the past nine months, nor does it reach a conclusion as to the ultimate long-run supply price for aluminum. Whether aluminum prices are at a level sufficient to attract new capacity at current energy prices, construction costs, and bauxite prices will be addressed in the six-metal study currently in progress at the Council. That report should be released before year’s end.

The central concern of this report can be stated very briefly: primary aluminum prices and the prices of most aluminum mill products remained virtually constant during a period of ten months from October 1974 through August 1975 when production fell by 26 percent. This rigidity in pricing was in sharp contrast to the behavior of aluminum prices in the 1971-72 period — following the previous recession when prices fell by more than 20 percent from their 1970 levels.

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