The pace of the downturn in the price of Europe’s key aluminum alloy grade, 226, slowed last week as spot prices fell by just Eur10/mt ($11/mt) instead of the Eur20-30/mt weekly falls that had become a regular occurrence since mid-April.
With many of the larger quarterly buyers having already fixed for the third quarter, sales activity was slower last week, market sources said.
“This week was quieter with holidays in Germany and Switzerland on Thursday,” an Italian alloy producer said.
He indicated that most sales for larger consumers were done at Eur1,670-1,690/mt delivered last week with smaller buyers paying Eur1,700-1,720/mt delivered.
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A German supplier said larger buyers had achieved prices in the region of Eur1,680/mt delivered and spot prices in general were “struggling at around Eur1,700/mt.”
In the week ended June 9, a large consumer fixed quantities for delivery to the Czech Republic at around Eur1,680/mt delivered, but last week the low end had shifted to around Eur1,670/mt delivered, a European trader said.
“It’s now not possible to sell at Eur1,700/mt delivered. … Some buyers are even indicating that they won’t pay more than Eur1,650/mt,” he said.
Russian ingot was heard on offer via the trade at very competitive prices and this had also pressured prices.
“Russians have interesting prices at Eur1,650/mt delivered,” said the trader, adding that the euro/dollar exchange rate had helped.
A European diecaster said that since fixing his Q3 volumes, market prices had moved down by around Eur40 and agreed market prices had fallen to around Eur1,670/mt.
Q3 demand from two large consumers was estimated to be down around 10% over Q2 and this could in part explain the recent pressure on prices, as alloy producers competed to win orders.
“It’s true that Q3 demand from a couple of consumers was down by around 10% over Q2, but Q2 was exceptionally strong, so globally demand is exactly the same as Q3 was just an adjustment,” a Spanish…