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A spate of aluminium business in Europe last week has not continued into this week as sellers reported quiet markets, though premiums have consolidated at higher levels.
Metal Bulletin’s European duty-unpaid aluminium premium widened to $115-135 per tonne from $120-130 on Tuesday June 23, but remains in a much narrower range and at a significantly higher level than its recent low of $80-115 per tonne on May 27.
The duty-paid premium stands at $175-190 per tonne, up from its low of $135-175, also last seen on May 27.
“We sold lots of metal last week, especially on remelt, and we were offering every day,” a trader said. “There was plenty of business in Central and Eastern Europe, and Italy is waking up too,” the trader added.
European premiums have recovered over the past month after outpacing the other major markets on the way down. The re-establishment of the three-month contango on the London Metal Exchange has also incentivised people to hold metal in the short term again, while consumer demand over the rest of the year has translated into volume buying.
But that buying has slowed this week, to the surprise of some in the market who had expected demand to increase following the fall in LME aluminium prices to their lowest level since the global financial crisis on June 19.
“It’s very quiet this week, and there’s not much demand,” a second trader said. “I expected more because prices and premiums are low. It could be a seasonal slowdown, but that should come later.”
Jethro Wookey jwookey@metalbulletin.com Twitter: @jethrowookey_mb