Proposal to launch new European aluminium diecasting ingot assessments [update]

Fastmarkets’ proposal follows initial feedback from market participants that such price assessments would bring useful transparency to these markets and support the growing use of recycled material by the automotive sector.

Europe is a major trading area for secondary aluminium pressure diecasting ingot and there is market demand to expand the range of price assessments from subscribers that already reference Fastmarkets’ assessment of the most widely traded grade, DIN 226.

Market participants have indicated that weekly published assessments of DIN 230 and DIN 239 would bring increased visibility to a fifth of all the secondary aluminium alloys traded in mainland Europe on an annualised basis, with some buyers of the grades already use Fastmarkets’ DIN 266 assessment in price formulas in their purchases and sales contracts. It is also much closer to the market than the current London Metal Exchange AA (aluminium alloy) quotation, according to market participants.

Fastmarkets will be assessing the pressure diecasting grade (D) grade material and not the sand and gravity casting grade material following feedback from the market.

In terms of overall European market share, DIN 226 accounts for 60% of annual trading activity, with DIN 230 and DIN 239 grades each accounting for 10% of business each year. The other 20% is DIN 231, which typically trades at a €100 per tonne premium to the DIN 226 price. All grades are used mostly in automotive manufacturing.

Notably, the DIN 230 and DIN 239 grades are purer and have fewer copper impurities, while DIN 230 is slightly higher grade material and so is slightly more expensive.

However, DIN 230 and DIN 239 grades are more influenced by the LME cash aluminium contract because they are purer and have fewer copper impurities, while DIN 230 is slightly higher grade and so is slightly more expensive.

These proposed prices will be assessed on a delivered Europe basis and will include material that has been generated within Europe. This decision was made to capture as much spot market liquidity as possible but may be adjusted in the future depending on market participant feedback and trading volumes captured in Fastmarkets’ assessments.

The proposed specifications for the new European aluminium pressure diecasting ingots are as below:

Assessment: Aluminium pressure diecasting ingot DIN230, delivered Europe, €/tonne
Quality: Ingot. Cu 0.08% max, Si 10.5-13.5%, Fe 0.45-0.9%, Mn 0.55% max, Zn 0.15% max
Quantity: Min 25 tonnes
Location: Delivered consumer works in Europe, most consumers in Northern Europe, in particular Germany
Timing: Within 2 months
Unit: EUR/tonne
Payment terms: 30 days, other payment terms normalized
Publication: Weekly. Friday 3-4pm London time

Assessment; Aluminium pressure diecasting ingot DIN239, delivered Europe, €/tonne
Quality: Ingot. Cu 0.08% max, Si 9.00-11.00%, Fe 0.45-0.9%, Mn 0.55% max, Mg 0.25-0.50%, Zn 0.15% max
Quantity: Min 25 tonnes
Location: Delivered consumer works in Europe, most consumers in Northern Europe, in particular Germany
Timing: Within 2 months
Unit: EUR/tonne
Payment terms: 30 days, other payment terms normalized
Publication: Weekly. Friday 3-4pm London time

The consultation period for this proposed price starts on July 14 and will end on Monday August 14, with an update to this proposal published on Wednesday August 16. Subject to market feedback, the proposed changes would take place beginning with the weekly assessment on August 25, 2023.

To provide feedback on this proposal, or if you would like to provide price information by becoming a data submitter to these assessments, please contact Declan Conway by email at: pricing@fastmarkets.com. Please add the subject heading: “FAO: Declan Conway re: Europe secondary aluminium diecasting assessments.”

To see all Fastmarkets’ pricing methodology and specification documents go to https://www.fastmarkets.com/methodology.

Editor’s note: This report has been updated to include additional information in the 1st, 2nd, 4th and 7th paragraphs concerning the use of these assessments in the secondary alloys market and to clarify some details about the content of the grades under proposal.