Primary Aluminium News - Market

European industrial aluminium clients delay contracts owing to sluggish demand in the region

  | AlCircle   |

European industrial aluminium clients are now experiencing a delay in supplying smelters with the required quantities for new contracts in 2024. This delay is mainly caused by concerns that they may exceed their purchase requirements, as the area's demand for finished metal goods has decreased significantly in recent years. Suppliers and customers are now engaged in the market's "mating season," during which corporations endeavour to secure supply agreements for the lightweight metal used in transportation, building, and packaging.

According to the reports, the industrial output in Germany, the largest European economy, had a greater decrease than anticipated in July. Additionally, the contraction in business activity throughout the eurozone was found to have progressed quicker than estimated in the previous month.

European industrial aluminium clients delay contracts owing to sluggish demand in the region

Also, many clients wait until November to provide final contract tonnages as they watch Europe's bleak economic condition. Ameera Abdulaziz, a trader with ZED Trading in the United Arab Emirates, added that several clients have been delaying shipping previously negotiated agreements due to the prevailing subdued market conditions.

Following the speaker, some consignments of alumina destined for the Middle East and aluminium intended for Europe, which were initially planned for delivery in June and July, have been rescheduled to August and September. In the opinion of BNP Paribas analyst David Wilson, the decline in premiums seen for aluminium billets accurately indicates the level of demand for aluminium from end-users.

Alumil, a prominent Greek manufacturer specialising in aluminium windows and other industrial goods, has received cautionary notices from some clientele indicating a potential decrease in orders ranging from 25 per cent to 30 per cent during the first part of the following year. According to Sotiris Voulgarakis, the Procurement Manager at Alumil, the family-owned firm is capitalising on the current state of low demand in the market when it seeks to acquire billets.

The world of aluminium extrusions

A customer in the United States reported that overall demand was stable, with the aerospace and automotive industries strong while the industrial and packaging sectors were down. Consumption in the world's largest market, China, has been more assertive than predicted, defying projections of weakness as the nation attempts to rebuild its economy, according to a Swiss trader who deals with Chinese firms.

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