European secondary aluminium prices steady, scrap under pressure

European secondary aluminium prices have been stable in the week to Friday August 25, while Fastmarkets launched two additional grades of alloy that have also been steady so far through the month

Fastmarkets assessed the price for aluminium pressure diecasting ingot DIN226/A380, delivered Europe, at €2,020-2,120 per tonne on Friday, stabilizing in the past week after a small loss the week before. But the market has been in steady decline since the start of the year after opening at $2,320-2,420 per tonne in the first week of January.

Fastmarkets on Thursday launched two new price assessments for the secondary aluminium market. The inaugural price assessments for aluminium pressure diecasting ingot DIN230, delivered Europe, and aluminium pressure diecasting ingot DIN239, delivered Europe, stood at €2,500-2,580 ($2,710-2,797) and €2,400-2,475 per tonne on Friday.

Both of the new grades are used in the automotive industry in applications such as boxes to house batteries used in electric cars, a growth industry for producers of such components. The grades are also used in chassis components, engine mounts and air springs in car manufacturing. The newly assessed grades are also used in chair frames, home appliances such as refrigerators, washing machines, dishwashers, dryers and televisions, as well as air conditioning units.

Ingot DIN 230 has more silicon content compared with its sister grade DIN 239, with the former containing 10.5-13% Si, compared with 9-11% in the latter, meaning DIN 230 grade is usually slightly more expensive. The bulk of secondary aluminium ingot production in total in Europe is DIN 226 grade and the overwhelming majority of that production is pressure diecasting material.

In terms of the new additions to Fastmarkets-assessed European grades, however, DIN 230 and DIN 239 are only slightly more made as pressure diecasting material in terms of volume than sand diecasting material. Sand casting leaves a rougher finish to the surface of manufactured parts, with material containing 0.4% iron and 0.3% copper, compared with 1% iron and 0.8% copper in pressure diecasting material.

“The ingot markets are rather quiet; all participants are waiting for September to bring some clearer outlook for price direction,” a European producer source said.

“But in our view, the market situation will only worsen due to ingot producers’ overcapacity, problems of smelters to cover their capacity, and the low inflow of scrap,” the producer source added.

“Everyone in the secondary aluminium business is really nervous about the fourth quarter as car sales will dramatically slow down,” a second producer source said.

“We are really pessimistic about the [European] ingot market after October. However, the scrap inflow continues to go down in Scandinavia, so that means less [ingot] supply. Our inflows of aluminium scrap are down about 15% in the past two months, which is severe,” the second producer added.

Some market participants said that the backlog of new orders for cars, a key area for secondary aluminium consumption, should be met in the next couple of months.

But it is customer orders for new cars after October and into early 2024 that is worrying metals producers; probably as a result of the lagging effect on the economy of strengthening interest rates and its impact on consumer spending. That effect, combined with energy costs, currency moves and the worry that heavy job losses may be inevitable at some point in the coming months is dragging on market sentiment for business conditions in the coming months.

Moreover, credit lines for both heavy industry and customers are also a worry, all of which raises the prospect of production cuts and shutdowns in the coming months, and there has already been remedial action to mitigate against weakening demand this year, with some smelters cutting production, participants said.

While one or two market participants said that original equipment manufacturers (OEMs) have been busy this quarter, the weight of market opinion suggested that OEMs have been shut this month – which last happened in the economic downturns of Covid-19 and the financial and economic slumps of 2008-2010 in the West.

An OEM is a company that makes and sells products, or parts of a product, that their buyer, another company, sells to its own customers while putting the products under its own branding. So a secondary aluminium producer will make such a product and sell them to a customer, which in turn will sell that product to its customer, such as a carmaker.

According to some secondary aluminium participants, OEMs are satisfied with at least half of their raw materials intake for September, with a negative outlook for the next quarter and beyond, they said.

Weakening scrap prices weighing on ingot

While market participants said that weakening scrap prices have been weighing on ingot prices, recent price weakness has yet to substantially knock secondary aluminium markets, although that may change if scrap price weakness persists in the near term.

Scrap export demand from Europe has also been relatively low key, with traditional export destinations in the Far East quieter than usual as Chinese and Japanese markets have opted to use more of their own ingot and scrap production than usual this quarter. Still, Taiwan and South Korea have been buying some loads from Europe recently, sources said.

Fastmarkets assessed the price for aluminium scrap floated frag, delivered consumer Europe, at €1,500-1,550 per tonne on Friday, narrowing downward by €50 per tonne from €1,500-1,600 per tonne on August 18. The market was as high as €1,680-1,780 per tonne through most of February.

“We are very pessimistic about market conditions in September and there is only hope for improvement in October,” a third ingot producer source said.

“After completing the backlog of new car orders from Covid there is little demand for new cars given the current economic conditions, and that extends to all areas as consumers are tightening their budgets a lot,” the third producer source said.

What to read next
A US court has struck down key reciprocal tariffs imposed by President Donald Trump, ruling that the International Emergency Economic Powers Act (IEEPA) does not grant unlimited tariff authority. While markets reacted positively, Section 232 duties on steel and aluminium remain in effect, prompting continued uncertainty and a likely appeal by the Trump administration.
Five key takeaways from our CIPS webinar.
The US aluminium industry is experiencing challenges related to tariffs, which have contributed to higher prices and premiums, raising questions about potential impacts on demand. Alcoa's CEO has noted that sustained high prices could affect the domestic market. While trade agreements might provide some relief, analysts expect premiums to remain elevated in the near term. However, aluminum demand is projected to grow over the long term, supported by the energy transition and clean energy projects. To meet this demand, the industry will need to increase production, restart idle smelters and address factors such as electricity costs and global competition.
Read Fastmarkets' monthly base metals market for May 2025 focusing on raw materials including copper, nickel aluminium, lead, zinc and tin.
The MB-AL-0408 aluminium low-carbon differential P1020A, cif Mexico was published at 3:02pm London time on May 20 instead of the scheduled time of 3-4pm on May 27. The erroneous price has been removed from Fastmarkets’ pricing database. The price will next be published on May 27 at its usual time. This price is a part of the Fastmarkets […]
The US trade roller coaster ride seems to be flattening, with signs of potential moderation and stability. It appears increasingly likely that our original expectation that the US Trump administration would primarily use the threat of tariffs as a negotiating strategy will be correct. While we do not expect to the US tariff position return to pre-2025 levels, we believe the overall US tariff burden is more likely to settle at around 10-30% globally rather than the elevated rates of 50-100% that seemed possible in recent weeks.