Rexam pushing aluminium cost-pass-through model in Europe

Global packaging group Rexam said it expects its aluminium price exposure risk to lessen over time as it pushes European customers to accept the cost-pass-through model it operates in the Americas. That model sees major customers agree the aluminium cost in advance with their suppliers, meaning "we are largely unaffected by the changes in the cost of aluminium in the Americas". In Europe, Rexam said it is negotiating with increasing numbers of large customers to opt for the pass-through model such that some 50% of metal requirements are expected to be on this basis in 2008. The company's exposure to the aluminium market is for 70,000t over the second half of 2007. It said it expects prices to be between $2,600/t and $2,700/t during that time.