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European secondary aluminium prices remained stable on Friday September 6, with both ingot and scrap values being shackled by low London Metal Exchange aluminium prices.
DIN226 gravity diecasting ingot stayed at €1,800-1,860 ($2,371-2,450) per tonne.
Ingot producers reported good-volume sales for the fourth quarter, while scrap supply was hit by the cessation of imports from the UK owing to a weak euro.
Sources said that aluminium prices will rise significantly next year only if the cuts in aluminium capacity continue.
“If you shut capacity then the price goes up,” a consumer said. “But it takes time for the decrease in capacity to influence prices. With the oversupply in the market I don’t see aluminium prices going up for two to three months.”
Several thousand tonnes of secondary aluminium went to consumers over the past week, with prices predominantly around the low end of the range, at about €1,800-1,820.
Scrap prices were stable, even as a weaker euro saw less scrap from the UK being sold into Europe. Supply levels have not been too badly affected as there is also very little leaving Europe to markets such as India, due to cripplingly low exchange rates in those regions.
“Scrap prices are stable and availability is actually better, because of lower export volumes,” a producer said.
“There is enough material around and we’ve had no problems buying scrap,” a second producer said. “We’ll see what happens in the next few weeks, but if there’s no change in scrap prices then there will be no change on the ingot side.”
So long as LME prices stay low, secondary ingot prices will not even be forced higher by the reduced capacity from German producer Oetinger, which is closing plants in Berlin and Hannover following its declaration of insolvency in June, as there is still enough capacity to satisfy demand, sources said.
“The market could come under pressure in October and November because the Oetinger capacity is out of the market, but I don’t believe so – not unless other producers close as well,” the consumer source said.
Jethro Wookey jwookey@metalbulletin.com Twitter: @jethrowookey_mb