Fastmarkets assessed the aluminium low-carbon differential P1020A, Europe at $10-25 per tonne on Friday, unchanged since December 1.
Some market participants continued to offer above the range, noting that the low-carbon differential has been supported by rising underlying premiums and concerns over availability of units in Europe.
But liquidity was limited throughout the month, keeping the P1020 low-carbon differential steady.
Cost pressures continued to affect the aluminium market, with sources telling Fastmarkets they saw little appetite from consumers to pay the upcharge.
Meanwhile, the low-carbon differential for aluminium billet increased, with tight supply for both primary and secondary billet in Europe supporting the market.
Ongoing disruption to trade via the Red Sea has prompted a rise in aluminium billet premiums across Europe, despite consumer demand remaining tepid.
“We’re offering secondary [low-carbon] billet on the same level [as primary] and it’s selling because supply is tight, but, demand still isn’t that good,” one producer source said.
Fastmarkets assessed the aluminium low-carbon differential billet, Europe at $5-20 per tonne, up 19.05% from $5-16 per tonne on March 1.
The low-carbon differential for VAP ex-billet was also unchanged on Friday, with several transactions reported within the existing range.
Fastmarkets assessed the aluminium low-carbon differential value-added product, ex-billet, Europe at $20-43 per tonne on Friday, unchanged from the previous session.
Focus in East Asia on Q2 negotiations, not ‘green’ material
Low liquidity and focus on the quarterly negotiations for primary aluminium in Asia has left the interest for low-carbon aluminium on the back burner, and the low-carbon aluminium differential in East Asia stable.
Fastmarkets assessed its aluminium low-carbon differential P1020A, Japan, South Korea at $0-10 per tonne on Friday, unchanged from the previous assessment on March 1.
The low-carbon differential was launched on March 1 in response to growing interest in the region and to bring transparency to the low-carbon aluminium market on a broader geographical scale.
“There’s interest for low-carbon aluminium in Asia, we’ve been receiving enquiries about it,” a trader said.
However, the interest for low-carbon aluminium can be varied.
“We have no intention to move toward green or low-carbon aluminium, unless the end users request for it. It is difficult for smaller-sized companies to place emphasis on low carbon, unless the differential can be passed on; we remain focused on the price,” a market participant said.
Meanwhile, tightness in the aluminium market has underpinned the quarterly negotiations and premiums in Japan and South Korea.
Fastmarkets’ assessment of the aluminium P1020A (MJP) spot premium, cif Japan was $120-135 per tonne on April 5, widened upward from $120-130 per tonne on March 1, amid low liquidity with market participants focused on the quarterly negotiations, where there was a large divergence between buyers and sellers.
Fastmarkets assessed the aluminium P1020A premium, cif South Korea at $150-160 per tonne on Tuesday April 2, up by 40.9% from $105-115 per tonne on February 27.
US differential unchanged but market sees slight uptick in demand
While the differential for low-carbon P1020A material remained unchanged, trading at par with high-carbon units, the value added low-carbon product differential saw a premium.
Fastmarkets assessed the aluminium low-carbon differential P1020A, US Midwest at zero on Friday, unchanged month on month.
But the aluminium low-carbon differential for value-added product, US Midwest was assessed at $0.00-0.01 per lb on April 5, with a sale reported at the high end of the range.
This is the first time the differential recorded a positive value since Fastmarkets launched its low-carbon aluminium differentials for the US market in November 2023.
On the other hand, many clients are interested in low-carbon units but are not willing to pay for it yet, a trader said.
The tightness in the availability of high-carbon units could also have motivated the buyer to purchase low-carbon value-added products, a second trader said, adding that they were seeing material tightness for all aluminium products.
Market participants have been reporting demand pick up and material tightness for both P1020A and value-added products in the US.
The daily aluminium P1020A premium, ddp Midwest US was assessed at $0.1925-0.2025 per lb on Friday, up by 8.97% from $0.1775-0.1850 per lb a month earlier, on March 1.
Fastmarkets’ assessment of the aluminium 6063 billet premium, delivered Midwest US was $0.075-0.100 per lb on Friday, up by 2.94% from a fortnight prior.
Want to know more about Fastmarkets’ recently launched low-carbon aluminium differential? You can read more about how we are responding to growing demand for green metal in Japan and South Korea here.
