European secondary Aluminium flat as market makes 2014 plans

European secondary aluminium ingot prices stayed flat on Friday October 18, with activity slowing ahead of negotiations over 2014 supply contracts.

“It’s still a little early to sign 2014 contracts, but that will happen in the next two or three weeks,” a producer in north Europe said.

DIN226 pressure diecasting ingot remained at €1,770-1,820 per tonne.

Demand is strong, with some producers unable to offer nearby spot tonnages because their operations are all given over to fulfilling contract obligations.

Demand has also been boosted by the insolvency of German ingot producer Oetinger. While German insolvency law has ensured that the company has remained in operation, the closure of its Berlin and Hanover plants has left a gap in the market that other producers are filling.

“Some of Oetinger’s former German customers are now asking for material, and they’re paying more to get it in time,” the producer said.

Scrap prices were also stable again this week, putting further pressure on margins after ingot prices edged down a week ago.

Cast quality scrap fell to €1,150-1,230 per tonne from €1,170-1,250 to reflect a lack of deals at the higher end over the past month, though buyers have not reported a specific fall this week.

“It’s been very difficult to move scrap prices in Europe,” a second producer said. “Compared to our August prices, scrap has fallen by €10-20 per tonne, while ingot prices have fallen by €35 per tonne. That goes straight to the margin.”