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Cancelled Merger Leads to Smelter Shutdown

Nov. 9, 2008
Spectro Alloys, Arkansas Aluminum deal hurt by market slowdown

Slack demand for secondary aluminum alloys, including orders from foundries and diecasters, has led two aluminum smelters to cancel their planned merger. And, that decision by Spectro Alloys Corp. and Arkansas Aluminum Alloys Inc. has led the latter company to idle production indefinitely.

"Arkansas Aluminum Alloys plans to temporarily shut down its smelting operations in Hot Springs, AR," according to a statement by the two companies. The Arkansas smelter has a capacity of 180 million lb./year of aluminum alloys, much of which is typically sold to foundries and diecasters, including many automotive suppliers.

The merger was announced last spring, and was expected to create a new company, ALX Recycling L.L.C., to be based in Rosemount, MN, where Spetro is headquartered. Financial details of the merger were never disclosed.

Spectro Alloys CEO Michael Tryon stated: "The uncertainty in the economy brings us to this decision and we remain interested in consolidation of the secondary aluminum industry. We may discuss combining with AAA and operating that plant when the economy improves."