Enhanced molten aluminium trade is a fruit of the dim billet market in H1’25

European aluminium billet manufacturers entered 2025 with caution, and by mid-year, that caution had hardened into sweeping production cuts. The billet market, once a bellwether for demand in construction, transport, and extrusion-heavy sectors, has weakened considerably in the first half of the year. In response, a notable shift has emerged: aluminium producers are pivoting towards enhanced molten metal trade as an alternative channel to absorb surplus capacity and meet more immediate domestic needs.

Image for referential purposes only (source: https://www.syalons.com/)

The strategic shift is not merely opportunistic. It’s a calculated survival tactic rooted in price pressures and vanishing demand.

The billet problem

Aluminium prices, both for primary and alloy grades, have fluctuated at unsustainable highs for much of H1 2025. This volatility is reshaping the economics of billet production, especially for downstream processors who now face elevated input costs and shrinking margins. According to the Shanghai Metals Market (SMM), the aluminium alloy Purchasing Managers’ Index (PMI) dropped steeply to 36.5 per cent in June, plunging 5 points from May and remaining well under the 50-point line that separates expansion from contraction. Even more troubling were the production and new orders indices, wherein both crashed to 22.9 per cent, marking year-to-date lows.

European producers have pointed to a lethal cocktail of problems: high energy costs, war-driven inflationary pressure, summer-seasonal slumps, and a major shortfall in new orders. “We can find solutions for energy or prices,” one European producer told SMM, “but if we don’t have orders, that’s the main issue.” With idle inventories piling up and cash flow tightening, several billet plants across Europe and Asia have either slowed production or gone into maintenance mode earlier than usual.