Proposal to launch European secondary aluminium billet premium

Fastmarkets proposes to launch a secondary aluminium billet delivered duty paid Europe premium in response to the recent growth in the secondary market.

The launch of a secondary aluminium billet premium assessment will allow Fastmarkets to bring additional transparency to the aluminium value-added product market.

The secondary aluminium billet premium will also complement the existing suite of Fastmarkets primary aluminium assessments, alongside Fastmarkets’ low-carbon differential for value-added-products.

The low-carbon differentials for P1020 and value-added products have widened during 2022 amid growing demand for lower-carbon products.

With interest in sustainability in the aluminium sector growing, market participants told Fastmarkets that there is growing need for transparency in the sector and its price relation to primary aluminium - with some noting that green demand could push secondary billet premiums above primary billet premiums.

Fastmarkets proposes to price the market on a monthly basis, publishing on the first Friday of the month - the same pricing schedule as Fastmarkets’ low-carbon aluminium differentials.

The proposed price specification is as follows:

- Secondary aluminium billet premium, ddp Europe
- Quality: Minimum 50% scrap
- Quantity: Minimum 100 tonnes
- Location: Delivered duty-paid Europe, premium on top of LME cash price
- Timing: Within 3 months
- Unit: USD per tonne
- Payment: 30 days after loading (other payment terms normalized)
- Publication: 3-4pm. Monthly, first Friday.
- Note: Other scrap-to-primary ratios normalized.

Fastmarkets invites feedback from the industry on whether the methodology should specify whether pricing should be done of post-consumer or extrusion scrap. Fastmarkets also invites market feedback on other minimum or maximum scrap and primary aluminium ratios.

The consultation period for this proposed launch starts on Friday November 4 and will end on December 2. The launch will take place, subject to market feedback, on January 6.

To provide feedback on this price or if you would like to provide price information by becoming a data submitter to this price, please contact Carrie Bone by email at pricing@fastmarkets.com. Please add the subject heading ‘FAO: Carrie Bone re: secondary aluminium billet’

To see all Fastmarkets’ pricing methodology and specification documents click on this link.

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