The cost of aluminum remains a concern for the beverage industry despite a recent decline in spot prices, according to a report by Banc of America Securities.
"Spot aluminum prices have retreated 23% since their May 11 peak…however prices are still up 8% year to date," said Bryan Spillane, an analyst for the research firm. If aluminum prices don't recede further, we still see cost inflation risk for the beverage industry with Coca-Cola, Cott and Molson Coors Brewing being the most exposed in our view."
Banc of America said that global demand and fear of strikes have caused a spike in prices.
"In addition, we believe there may have been some pre-buying of cans ahead of a potential strike," he said.
Aluminum Costs Concern Beverage Industry
The cost of aluminum remains a concern for the beverage industry despite a recent decline in spot prices, according to a report by Banc of America Securities. "Spot aluminum prices have retreated 23% since their May 11 peak…however prices are still up 8% year to date," said Bryan Spillane, an analyst for the research firm.
Aug 30, 2006