Tuesday, March 10, 2009

The Aluminum Sector is in Crisis 

What happens when you have a an industry that is barely in the red during high prices? it becomes an catastrophe when prices fall by 60%. That is the case with Alcasa and Venalum, both produce Aluminum at 3500$ per ton, yet the current price is 1200-1500$ per ton.

The disaster only gets worse when you figure out what is the cost of getting out of it, by one person's account it means 6 billion dollars, a figure way too inflated for me to believe BTW. The problem preceded Chavez, but he gets one hell of the blame for letting the problem fester for so long, and it really really makes me worry that the same will happen to Sidor again under re-nationalization.

Too much labor and too little technology, that is the problem with Alcasa and Venalum, is the cost of fixing them so they can fall back down worth it? It is, but there better be accountability from now on, which I doubt.


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