Surcharge Information
There will be no surcharge for July 2010 shipments.
| 6xxx: | $0.000/lb. | |
| All other alloys: | $0.000/lb. |
| 6xxx Alloys ($/lb) | |||||
|---|---|---|---|---|---|
| Month of Shipment |
Month of DOE data |
Natural Gas (a) |
Electricity (b) |
Diesel (c) |
Surcharge (a+b+c) |
| Jan-08 | Nov-07 | $0.0008 | $0.0000 | $0.0025 | $0.003 |
| Feb-08 | Dec-07 | $0.0009 | $0.0000 | $0.0022 | $0.003 |
| Mar-08 | Jan-08 | $0.0067 | $0.0000 | $0.0020 | $0.009 |
| Apr-08 | Feb-08 | $0.0100 | $0.0000 | $0.0024 | $0.012 |
| May-08 | Mar-08 | $0.0161 | $0.0000 | $0.0048 | $0.021 |
| Jun-08 | Apr-08 | $0.0208 | $0.0000 | $0.0058 | $0.027 |
| Jul-08 | May-08 | $0.0282 | $0.0003 | $0.0074 | $0.036 |
| Aug-08 | Jun-08 | $0.0371 | $0.0027 | $0.0086 | $0.048 |
| Sep-08 | Jul-08 | $0.0269 | $0.0039 | $0.0087 | $0.040 |
| Oct-08 | Aug-08 | $0.0082 | $0.0043 | $0.0068 | $0.019 |
| Nov-08 | Sep-08 | $0.0044 | $0.0037 | $0.0055 | $0.014 |
| Dec-08 | Oct-08 | $0.0000 | $0.0026 | $0.0033 | $0.006 |
| Jan-09 | Nov-08 | $0.0000 | $0.0015 | $0.0000 | WAIVED |
| Feb-09 | Dec-08 | $0.0000 | $0.0018 | $0.0000 | WAIVED |
| Mar-09 | Jan-09 | $0.0000 | $0.0010 | $0.0000 | WAIVED |
| Apr-09 | Feb-09 | $0.0000 | $0.0015 | $0.0000 | WAIVED |
| May-09 | Mar-09 | $0.0000 | $0.0021 | $0.0000 | WAIVED |
| Jun-09 | Apr-09 | $0.0000 | $0.0026 | $0.0000 | WAIVED |
| Jul-09 | May-09 | $0.0000 | $0.0034 | $0.0000 | WAIVED |
| Aug-09 | Jun-09 | $0.0000 | $0.0049 | $0.0000 | WAIVED |
| Sep-09 | Jul-09 | $0.0000 | $0.0063 | $0.0000 | WAIVED |
| Oct-09 | Aug-09 | $0.0000 | $0.0051 | $0.0000 | WAIVED |
| Nov-09 | Sep-09 | $0.0000 | $0.0033 | $0.0000 | WAIVED |
| Dec-09 | Oct-09 | $0.0000 | $0.0029 | $0.0000 | WAIVED |
| Jan-10 | Nov-09 | $0.0000 | $0.0018 | $0.0000 | WAIVED |
| Feb-10 | Dec-09 | $0.0000 | $0.0017 | $0.0000 | WAIVED |
| Mar-10 | Jan-10 | $0.0000 | $0.0005 | $0.0000 | WAIVED |
| Apr-10 | Feb-10 | $0.0000 | $0.0009 | $0.0000 | WAIVED |
| May-10 | Mar-10 | $0.0000 | $0.0013 | $0.0002 | WAIVED |
| Jun-10 | Apr-10 | $0.0000 | $0.0012 | $0.0008 | WAIVED |
| Jul-10 | May-10 | $0.0000 | $0.0018 | $0.0009 | WAIVED |
| Other Alloys *($/lb) | |||||
|---|---|---|---|---|---|
| Month of Shipment |
Month of DOE data |
Natural Gas (a) |
Electricity (b) |
Diesel (c) |
Surcharge (a+b+c) |
| Jan-08 | Nov-07 | $0.0011 | $0.0000 | $0.0025 | $0.004 |
| Feb-08 | Dec-07 | $0.0012 | $0.0000 | $0.0022 | $0.003 |
| Mar-08 | Jan-08 | $0.0091 | $0.0000 | $0.0020 | $0.011 |
| Apr-08 | Feb-08 | $0.0136 | $0.0000 | $0.0024 | $0.016 |
| May-08 | Mar-08 | $0.0220 | $0.0000 | $0.0048 | $0.027 |
| Jun-08 | Apr-08 | $0.0284 | $0.0000 | $0.0058 | $0.034 |
| Jul-08 | May-08 | $0.0385 | $0.0008 | $0.0074 | $0.047 |
| Aug-08 | Jun-08 | $0.0506 | $0.0071 | $0.0086 | $0.066 |
| Sep-08 | Jul-08 | $0.0367 | $0.0106 | $0.0087 | $0.056 |
| Oct-08 | Aug-08 | $0.0112 | $0.0114 | $0.0068 | $0.029 |
| Nov-08 | Sep-08 | $0.0060 | $0.0099 | $0.0055 | $0.021 |
| Dec-08 | Oct-08 | $0.0000 | $0.0071 | $0.0033 | $0.010 |
| Jan-09 | Nov-08 | $0.0000 | $0.0039 | $0.0000 | WAIVED |
| Feb-09 | Dec-08 | $0.0000 | $0.0048 | $0.0000 | WAIVED |
| Mar-09 | Jan-09 | $0.0000 | $0.0028 | $0.0000 | WAIVED |
| Apr-09 | Feb-09 | $0.0000 | $0.0040 | $0.0000 | WAIVED |
| May-09 | Mar-09 | $0.0000 | $0.0057 | $0.0000 | WAIVED |
| Jun-09 | Apr-09 | $0.0000 | $0.0070 | $0.0000 | WAIVED |
| Jul-09 | May-09 | $0.0000 | $0.0091 | $0.0000 | WAIVED |
| Aug-09 | Jun-09 | $0.0000 | $0.0132 | $0.0000 | WAIVED |
| Sep-09 | Jul-09 | $0.0000 | $0.0169 | $0.0000 | WAIVED |
| Oct-09 | Aug-09 | $0.0000 | $0.0136 | $0.0000 | WAIVED |
| Nov-09 | Sep-09 | $0.0000 | $0.0088 | $0.0000 | WAIVED |
| Dec-09 | Oct-09 | $0.0000 | $0.0078 | $0.0000 | WAIVED |
| Jan-10 | Nov-09 | $0.0000 | $0.0047 | $0.0000 | WAIVED |
| Feb-10 | Dec-09 | $0.0000 | $0.0046 | $0.0000 | WAIVED |
| Mar-10 | Jan-10 | $0.0000 | $0.0014 | $0.0000 | WAIVED |
| Apr-10 | Feb-10 | $0.0000 | $0.0025 | $0.0000 | WAIVED |
| May-10 | Mar-10 | $0.0000 | $0.0035 | $0.0002 | WAIVED |
| Jun-10 | Apr-10 | $0.0000 | $0.0032 | $0.0008 | WAIVED |
| Jul-10 | May-10 | $0.0000 | $0.0049 | $0.0009 | WAIVED |
* all 3xxx, 4xxx, 5xxx, 2xxx and 7xxx series alloys
| 2007 Average Energy Prices | |||
|---|---|---|---|
| Natural Gas ($ / mcf) |
Electricity ($ / kwh) |
Diesel ($ / gal) |
|
| 2007 Average | $7.1830 | $0.0635 | $2.8820 |
| Monthly Average Energy Prices | ||||
|---|---|---|---|---|
| Month of DOE data |
Natural Gas ($ / mcf) |
Electricity ($ / kwh) |
Diesel ($ / gal) |
|
| Nov-07 | $7.3130 | $0.0622 | $3.3955 | |
| Dec-07 | $7.3212 | $0.0625 | $3.3406 | |
| Jan-08 | $8.2452 | $0.0627 | $3.3078 | |
| Feb-08 | $8.7648 | $0.0636 | $3.3770 | |
| Mar-08 | $9.7443 | $0.0636 | $3.8808 | |
| Apr-08 | $10.4863 | $0.0643 | $4.0835 | |
| May-08 | $11.6545 | $0.0655 | $4.4250 | |
| Jun-08 | $13.0707 | $0.0696 | $4.6770 | |
| Jul-08 | $11.4462 | $0.0725 | $4.7030 | |
| Aug-08 | $8.4872 | $0.0733 | $4.3020 | |
| Sep-08 | $7.8795 | $0.0720 | $4.0240 | |
| Oct-08 | $6.9422 | $0.0695 | $3.5760 | |
| Nov-08 | $6.8701 | $0.0669 | $2.8760 | |
| Dec-08 | $5.9946 | $0.0676 | $2.4490 | |
| Jan-09 | $5.3972 | $0.0659 | $2.2920 | |
| Feb-09 | $4.6453 | $0.0669 | $2.1950 | |
| Mar-09 | $4.0788 | $0.0683 | $2.0920 | |
| Apr-09 | $3.6225 | $0.0695 | $2.2200 | |
| May-09 | $3.9552 | $0.0713 | $2.2270 | |
| Jun-09 | $3.9140 | $0.0748 | $2.5290 | |
| Jul-09 | $3.5030 | $0.0780 | $2.5400 | |
| Aug-09 | $3.2342 | $0.0751 | $2.6340 | |
| Sep-09 | $3.0627 | $0.0710 | $2.6260 | |
| Oct-09 | $4.1229 | $0.0702 | $2.6720 | |
| Nov-09 | $3.7698 | $0.0675 | $2.7920 | |
| Dec-09 | $5.5002 | $0.0674 | $2.7450 | |
| Jan-10 | $6.0049 | $0.0647 | $2.8450 | |
| Feb-10 | $5.4796 | $0.0656 | $2.7850 | |
| Mar-10 | $4.4187 | $0.0665 | $2.9150 | |
| Apr-10 | $4.1509 | $0.0662 | $3.0590 | |
| May-10 | $4.2642 | $0.0677 | $3.0690 | |
Index information is reflected on date listed and is not updated with DOE revisions.
The above prices are quoted by the Department of Energy on its web site:
Diesel: http://tonto.eia.doe.gov/dnav/pet/hist/ddr001m.htm
Gas: STEO_m_gas.xls
Electricity: STEO_m_electricity.xls
Diesel: http://tonto.eia.doe.gov/dnav/pet/hist/ddr001m.htm
Gas: STEO_m_gas.xls
Electricity: STEO_m_electricity.xls
The energy surcharge reflects the increase in costs for natural gas, electricity, and diesel fuel as compared to the average prices of these costs in 2007. For example, the average prices in May 2010 and average prices for 2007 for these commodities were:
| May-10 | 2007 Base Price | Dollars per Unit | |
|---|---|---|---|
| Natural Gas | $4.2642 | $7.1830 | Henry Hub, 000’s of cubic feet (mcf) |
| Electricity | $0.0677 | $0.0635 | US Industrial; Kilowatt-hours (KWh) |
| Diesel | $3.0690 | $2.8820 | US retail, per gallon |
Monthly prices are available on the DOE web site approximately the middle of the following month. When known, such prices will apply to the calculation for products shipped in the next following month. For example, prices for May 2010 are posted on the DOE web site in mid-June, and such May prices will apply to the energy surcharge calculation for all scheduled shipments in July 2010.
For each commodity, the change in price for each month (compared to the 2007 base average price) will be multiplied by a usage factor for each commodity for (a) 6xxx alloys products and (b) all other alloy products. Those factors will remain constant and are:
| Usage per pound |
6xxx Alloys | Other Alloys | Units |
|---|---|---|---|
| Natural Gas | 0.0063 | 0.0086 | mcf / pound |
| Electricity | 0.4371 | 1.1704 | KWh / pound |
| Diesel | 0.0048 | 0.0048 | gallons / pound |
Continuing with the example above, orders scheduled to ship in July 2010 will reflect the following energy surcharge:
| 6xxx Alloys | Example: May 2010 DOE prices applied to July 2010 Orders |
|||
|---|---|---|---|---|
| Natural Gas | Electricity | Diesel Fuel | ||
| May 2010 Prices | $4.2642 | $0.0677 | $3.0690 | |
| Base 2007 Average Prices |
$7.1830 | $0.0635 | $2.8820 | |
| Difference | -$2.9188 | $0.0042 | $0.1870 | |
| Usage Factor per lb | 0.0063 (mcf/lb) |
0.4371 (kwh/lb) |
0.0048 (gal/lb) |
|
| Dollars per pound | $0.0000 | $0.0018 | $0.0009 | WAIVED |
| (a) | (b) | (c) | (a+b+c) | |
| Other Alloys* | Example: May 2010 DOE prices applied to Jul 2010 Orders |
|||
|---|---|---|---|---|
| Natural Gas | Electricity | Diesel Fuel | ||
| May 2010 Prices | $4.2642 | $0.0677 | $3.0690 | |
| Base 2007 Average Prices |
$7.1830 | $0.0635 | $2.8820 | |
| Difference | -$2.9188 | $0.0042 | $0.1870 | |
| Usage Factor per lb | 0.0086 (mcf/lb) |
1.1704 (kwh/lb) |
0.0048 (gal/lb) |
|
| Dollars per pound | $0.0000 | $0.0049 | $0.0009 | WAIVED |
| (a) | (b) | (c) | (a+b+c) | |
* all 3xxx, 4xxx, 5xxx, 2xxx and 7xxx series alloys
For convenience, the attached 
worksheet will allow the calculation of the energy surcharge for historical months or projected months, as the surcharge may apply to pounds shipped. Inputs required are the relevant monthly prices for natural gas, electricity, and diesel fuel as well as the pounds of 6xxx alloy or other alloy products.
worksheet will allow the calculation of the energy surcharge for historical months or projected months, as the surcharge may apply to pounds shipped. Inputs required are the relevant monthly prices for natural gas, electricity, and diesel fuel as well as the pounds of 6xxx alloy or other alloy products.During 2008, costs for natural gas, electricity and diesel fuel increased dramatically over the prior year. While Kaiser Aluminum absorbed increases over previous years, the escalation required us to adjust our pricing accordingly via the implementation of a surcharge.
We will pass on increases in these costs above a baseline of 2007 levels and concluded that a surcharge is the best vehicle to address this issue. We maintain the data and tracking mechanisms used to support the surcharge on the Kaiser Aluminum Web Site to allow our customers to regularly monitor these commodity costs as they relate to their products.