SHANGHAI Nov. 4 (CBI China)--Kaiser Aluminum announced the addition of energy surcharges for all new orders of fabricated aluminum products from July 1st, in order to compensate for rising energy costs, including natural gas, electricity, and diesel. The energy surcharges are calculated based on indices of the US Department of Energy and will be updated on a monthly basis.
The rising costs for crude oil and electric power have increased costs for producers of aluminum semis. Large overseas aluminum semis producers can maintain profit margins by imposing energy surcharges, but domestic aluminum semis producers will unlikely adopt this tactic since they are faced with severe competition and a price war in domestic markets. As a result, profits for aluminum semis producers will experience sharp declines in 2008.
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