Europe aluminum alloy: Market prices and volumes steady

Spot market prices for the key grade of European aluminum alloy, 226 ingot, remained steady this week as buyers continue to request high volumes.

"Volumes are stable this week," a German alloy producer said, adding that demand had been very strong so far for the fourth quarter.

"We are fully booked for October and November delivery and we can deliver small quantities for December," the producer said, noting that he had sold 226 to a mid-size buyer at the upper end of the current price range at Eur1,840/mt delivered.

A German trader said the market had been relatively quiet with just a few requests for November/December delivery.

"The LME fell back this week because of worse-than-expected economic indicators from the US, which then affected Europe too, so that keeps buyers away from the market," he said.

Meanwhile, an Italian seller said the mood in the market was still positive after good demand levels in Q3 were expected to continue throughout Q4.

Volumes from marginal producers were extremely limited and this was keeping spot market prices stable at either side of Eur1,800/mt ($2,308/mt) delivered plus credit, he said.

"Demand is high and producers in Poland and Italy now have good demand in their domestic markets so this could cause some problems in delivering to Germany," warned a second German seller.

One key diecaster was seeking offers for next year, including annual, bi-annual and quarterly contracts either based on the LME or other indexes.

The buyer was expected to conclude some of its business by the middle of October. "We are seeing offers at between Eur1,790-1,810/mt delivered for Q1," he said.

A second trader said market prices remained at either side of Eur1,800/mt delivered, though the LME was under pressure this week and the US dollar fell against the euro to $1.28 from 1.26 a week ago.

"The LME [primary aluminum] price in euro terms is now lower but this has not had any affect on scrap or 226 yet," he said.

The Platts assessment of the standard 226 grade spot price remained unchanged this week at Eur1,790-1,850/mt delivered Germany, including 30 days of credit.

Spot indications for 231 grade were also unchanged at Eur1,830-1,880/mt delivered Germany.

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