Kaiser aluminum introduces energy surcharge

Kaiser Aluminum will begin enacting fuel surcharges for new fabricated product orders beginning July 1. The company says the decision is based on an effort to reduce exposure to rising costs for natural gas, electricity and diesel fuel.

“These surcharges are essential to mitigate the extraordinary rise in costs related to energy that we have been absorbing for several years,” says Jack A. Hockema, president, chairman and CEO of Kaiser Aluminum. “Commodity prices for natural gas and diesel fuel leapt roughly 60 percent in May compared to the 2007 average. These energy prices are spiraling and highly volatile, so we’ve elected to introduce a surcharge as the most transparent method to recover these costs.”

The surcharges are based on a calculation tied to indices provided by the U.S. Department of Energy and will be updated on a monthly basis. Customers can view the formulas for calculating surcharges on the Kaiser Aluminum Web site at www.kaiseraluminum.com. Up-to-date information on how these surcharges impact specific products will also be included on the site.

“We’re currently evaluating methods to address the significant increases in the costs of alloying materials, such as magnesium and copper,” Hockema adds. “We also continue our aggressive pursuit of cost reduction initiatives designed to offset other inflationary cost pressures.”

The company adds that commodity prices for natural gas and diesel fuel have increased 60 percent over last year's averages.