In a note to customers a week ago, Alcoa (NYSE:AA) said it's going to increase the price of its European mill products it delivers in the fourth quarter, citing rising input costs as necessitating the move.
The Alcoa European Mill Products unit manufactures aluminum flat rolled products, which higher prices will have inflationary effects on the automotive and commercial vehicle sector, aerospace, industrial, building and consumer durables markets.
Higher costs are coming from energy, metal premiums and alloying elements.
Another factor, along with passing on higher inputs, is the tight supply of aluminum, according to the company's letter.
Alcoa said they sent the letter so their customers can prepare for the fourth quarter and 2011 when they begin negotiating contracts going forward.
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