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Various media reports released on Friday January 7 revealed that French aluminium smelter Dunkerque plans to curtail a further 5% of smelter production due to high energy costs.
The company previously announced the planned curtailment of 10% of smelter output. Additional production cuts will bring total production down by 15%, sources said.
This news follows recent announcements from other European aluminium producers such as Alcoa, Norsk Hydro and Alro who have also pulled back production due to soaring energy costs.
Tight supply in the European market is having a direct impact on aluminium premiums, and Fastmarkets assessed the aluminium P1020A premium, in-whs dp Rotterdam at $415-450 per tonne on Friday January 7, up from $410-440 per tonne the previous session and up by 183% from the same time last year.
“The nearby curve is supportive and with the current macro environment we should see premiums well supported in Q1,” one trader told Fastmarkets.
The aluminium cash-to-three month forward spread was most recently trading at a $7.75-per-tonne contango, with all nearby forward spreads in contango.
Beyond Rotterdam, market participants also remain bullish, with high offers and reports of tight market conditions for primary units in Italy.
Fastmarkets assessed the aluminium P1020A premiums, dp fca Italy at $420-450 per tonne on January 4, up from $400-420 per tonne the previous week and the highest level for the grade since Fastmarkets began assessing it in 2016.