Aluminium Alloy Prices Rebound in Europe, While Scrap Prices Hold Fast

Prices for secondary aluminium in Europe appear to have leveled off this week, ending a slip in prices that began several weeks prior.

The drop began in the early days of April, when ingot 226 topped out at €1,820-1,880/mt delivered plus credit. Since then the primary grade of recycled aluminium fell each week to a low of €1,650-1,700/mt last week.

According to sources, the slowdown is due to summer turnarounds and holidays, but some larger consumers are still in the market to buy.

“We hear buyers seeking low levels of €1,640/mt delivered, but at the same time we have succeeded in gaining some orders at above €1,700/mt delivered,” a Polish seller told Platts.

An Italian producer told the outlet that €1,650/mt was their cutting-off point, but €1,700/mt delivered was the bare minimum due to current scrap metal costs.

According to a German diecaster, rumors of €1,650/mt were currently in the air. “I am not sure if this is the bottom of the market, we could possibly see lower in the summer months,” he opined.

The market for aluminium scrap has fared better on the continent, however. Buyers have been leaning on sellers to relax prices, but sellers have remained steadfast, citing margins that are currently razor thin.

“Scrap prices are very stable, there’s no space for any improvement,” explained a Polish alloy producer. She went on to say that turnings were still priced at around €1,150-1,200/mt delivered. “We try to buy old cast at €1,250/mt delivered but we are losing out to buyers who will pay €1,300/mt,” she concluded.

This situation may not be supportable by foundries, according to a German source who spoke to Platts.

“If the market continues this way with high scrap costs versus low ingot sales prices, we could see some insolvencies in the market soon,” he warned.



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