Hodgdon controls the entire US distribution of some grades, primarily the Australian ADI manufactured 'Extreme' powders, so commercial US sporting/target ammunition companies obtain it through this source. Military ammo is another matter, so If Lake City say wants very large quantities of ADI tubular grades, it would negotiate with and order directly from ADI as you suggest .......... but it doesn't want or use such large quantities of this type, in fact probably none at all (see below).
I just can't accept this assertion. Military smallarms ammunition is overwhelmingly loaded with ball-type powders, and many procurement agencies including the US forces insist on this type except for a few special-purpose loadings. We're talking H4198 and H4895 and other ADI made Extreme extruded products whose military use is nil or near nil, and which, as with all Extreme Extruded grades command very much higher prices in a premium civilian niche market segment. Military sales were more lucrative! Really?
The long and the short of it is that there is excess demand in the USA alone for these ADI powders in relation to the company's manufacturing capabilities and the few South-Pacific shipping services that operate. We in Europe lost all of these powders around four years ago thanks to EU REACH regs, but long before that many Hodgdon Extreme grades were so rare here as to be unobtainable since in practice nearly everything was even then going to the US civilian handloading market, and damn all elsewhere (including ADI's own domestic market in Australia as any Aussie handloader will tell you, and they pay premium prices too but not to Hodgdon of course as they buy from ADI's own domestic operation). IIRC Edgar Brothers, the UK/European Hodgdon distributor had 15,000lb VarGet alone on back-order some years before both REACH and Ukraine, and there has been massive growth in US civilian shooting activity in subsequent years and consequent demand for all types of ammunition and components.
There is an overall western world shortage of smallarms propellants and in particular the wet nitrocellulose base material that is sold around the world. (Only a few explosives factories make this essential element themselves and many energetics manufacturers buy it in. Consider for a second how much base nitrocellulose is required by a single 155mm artillery shell, so every shell fired on the Ukrainian side abstracts it from the West's fixed supply that would otherwise be used in whatever type of propellant - and this has nothing at all to do with Hodgdon except its costs for finished powders will rise like everybody else's as is normal when demand outstrips supply.) The answer is to open new manufacturing facilities, the entire opposite of what has happened in the West over the last 40 years. To do this will require great political will in the face of extreme public hostility to any new dangerous materials and potentially polluting manufacturing plant, and of course would require governments to stamp really hard on their own safety agencies. There isn't a single pound of extruded smallarms powder made in the USA, nor has there been since since Dupont closed and manufacturing of its products was moved to Canada, and I'm told by reliable US sources that your own EPA has a great deal to do with that thanks to its safety regulations. The US only makes ball-types and the LCAAP or whichever US government agency procures ammunition components on its behalf deals directly with General Dynamics St. Marks Powder Co. and others, not with Hodgdon. That is despite Hodgdon marketing and distributing all of the handloading marques and products made by St. Marks.
