European secondary aluminium producers frustrated by low LME prices

European secondary aluminium prices stayed flat on Friday September 13, as low London Metal Exchange prices continued to hinder any price increases that would otherwise spring from strong demand.

“We thought prices would rise with increased demand, but they have remained stable for a long time,” one producer said.

“When we offer, we have to offer at the same level,” he added.

DIN226 pressure diecasting ingot stayed at €1,800-1,860 per tonne. Sellers reported strong demand for volumes even over those already booked for the fourth quarter.

“Even those that have already bought for the fourth quarter are coming back for additional quantities,” a second producer said, pointing to the strong vehicles market as the source of much of the additional demand.

“We have good expectations for next year – demand from the market is very, very high,” the second producer said. “We are getting new enquiries every day.”

But while low LME prices have prevented higher ingot prices, they have not resulted in lower scrap prices, which may otherwise have resulted from an increase in available material since the closure of certain export markets.

Instead, many scrap dealers are simply holding metal back from the market until they can secure better prices.

“Scrap prices are stable, and it’s frustrating,” a third producer said.

“The LME correlation has been broken. The only explanation is that there isn’t much scrap available,” he added.