More Capacity, Lower Price

Three months after it caught the devil from the Senate Defense Committee on the nation's aluminum shortage, OPM finally had some definite progress to point to last week. Drawn up was a contract under which Aluminum Co. of America will build three Government-owned plants which will produce 340,000,000 lb. of aluminum ingots a year, thus increase present U.S. capacity (built and abuilding) by 40%.

The new plants will be in Massena, N.Y., the Bonneville Dam region, somewhere in Arkansas. In Arkansas Alcoa will also build a plant to produce 400,000,000 lb. a year of alumina (intermediate step between bauxite ore and the finished metal). The plants (cost: $52,000,000) will be operated by Alcoa under a five-year lease. For its managerial services, Alcoa will get a meager 15% of the profits, the Government the rest.

At the same time Alcoa cut its price, starting Oct. 1, from 17-c- to 15-c- a lb. Although Jesse Jones, who announced it, had a part in its timing, the cut itself was part of Alcoa's benevolent-despot policy of cutting prices as production increased. The cut was made timelier by the coolness between Alcoa and newcomer Reynolds Metals Co., each of which distrusts the other's cost-price claims. In any case, it will save the Government about $15,000,000 a year on aluminum.

Alcoa's new plants will relieve but not end the aluminum shortage. Still uncontracted for is the rest of the expansion program announced by OPM shortly after the Senate investigation: four plants aggregating 260,000,000 lb. capacity to be operated by Reynolds, Bohn Aluminum & Brass, Union Carbide & Carbon, Olin Corp. Present capacity plus the new Alcoa expansions totals 1,200,000,000 lb. a year. Estimated Army, Navy, Lend-Lease and "essential" civilian requirements: 1,400,000,000 lb. for 1942.

To make 1,400,000,000 lb. of aluminum a year, the nation will need 2,800,000,000 lb. of alumina (in addition to large amounts used raw by chemical and abrasives industries). With Alcoa's new alumina plant, U.S. capacity will be something over 2,000,000,000 lb. a year. About to be signed with Reynolds is a contract for another alumina plant which will add 200,000,000 lb. To make up part of the remaining alumina deficit, OPM recommended last week that still another 600,000,000 lb. of Government-owned capacity be added to Alcoa's alumina facilities in Arkansas.

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