Aluminium billet premiums fall in key global locations except for US market –

• Pace of European decreases slows
• Thai market slips on thinner liquidity
• Brazilian premiums retreat
• US premiums tick higher on fresh trades

Aluminium premiums in Europe declined at a slower pace 

Premiums in Europe declined at a slower pace over the last month, with first-quarter negotiations now being concluded, sources told Fastmarkets.

Fastmarkets’ weekly assessment of the aluminum 6063 extrusion billet premium, ddp Italy (Brescia region) was $350-390 per tonne on Friday, down from $370-390 per tonne on November 17.

“The pace of reductions has slowed down. These levels are clearly loss-making. Everyone is trying to push inventory down, but stocks are relatively low historically; we have less European billet production after all the shutdowns,” a market source said.

“Producers are done offering and scrambling trying to get customers to book,” a trader said.

The approaching Christmas holidays had many concluding first-quarter negotiations, with many mills expected to take an extended maintenance period amid the poor consumer demand.

“The premiums are stable [this week], as everyone is wrapping up for Christmas holidays, everyone is discussing the same numbers,” a producer source said.

Fastmarkets’ weekly assessment of the aluminium 6063 extrusion billet premium, ddp North Germany (Ruhr region) was $345-390 per tonne on Friday, down from $360-390 per tonne on November 17.

Despite the lower premiums, some had noted a recent uptick in demand as the year end approached.

“We see some consumers coming with enquiries wanting to book at fixed price premiums,” a second trader said.

In Spain, billet premiums also declined during the month, but only by $10 per tonne on the low end of the range.

Fastmarkets’ twice-weekly assessment of the aluminium 6063 extrusion billet premium, ddp Spain was $340-370 per tonne on Friday, down from $350-370 per tonne on November 17.

Liquidity remained high in the Spanish market, with the bulk of trades done within the existing range.

Some participants continued to see lower levels but others were now seeing more stability after the long downward trend.

Weak demand in Asia adds pressure on the market

The aluminium extrusion billet premium in Thailand dipped in a low liquidity market amid sustained weak demand that added downside pressure on the market.

Fastmarkets’ monthly assessment of the aluminium 6063 extrusion billet premium, cif Thailand was $220-240 per tonne on Friday, down from $255-265 per tonne on November 17.

Market participants remain focused on the long-term contract discussions, leaving the spot market with low liquidity.

“Offers for billets on long-term contracts have been revised down, we heard it’s as low as [main Japanese ports] + $130 per tonne,” a market participant said.

“Overall demand for billets remains weak,” a second market participant said.

Thailand’s industrial sentiment index remained pessimistic despite rising after five consecutive months of decline in November, landing at 90.9 up from 88.4 in October, amid manufacturers’ improved sales and production, according to the Federation of Thai Industries (FTI).

Meanwhile, automotive production in Thailand dropped 7.02% in October on a year-on-year basis to 158,734 units amid weak domestic sales and tighter auto loans, according to the FTI.

Talks of discounted material coming to Brazil

Aluminium billet premiums fell in the Brazilian market after higher offers vanished and there were talks of more discounted material potentially coming into the country.

Fastmarkets’ twice-weekly assessment of the aluminium 6063 & 6060 extrusion billet premium, cif Brazilian main ports was $325-340 per tonne on Friday, narrowing downward by $20 per tonne from $325-360 per tonne on December 1.

The premium had previously risen slightly amid stronger market conditions, but new offers were being heavily discounted and demand had softened ahead of end-of-year holidays.

Offers were mostly at $325-340 per tonne during the fortnight to Friday, and no deal was reported. Premiums above $340 per tonne were no longer heard in the market.

Meanwhile, negotiations were ongoing to take aluminium billet into the country at premiums as low as $300 per tonne. Those had not been concluded by the time of publication, however.

“The market has already slowed down,” a trader source in the region said. “Holidays are coming, and extrusion companies also do not want to end the year with high inventories.”

“I’m expecting next year to be similar to 2023. We believe demand will remain stable,” a second trader in the region said.

The US market has narrowed upwards in the past week

Fastmarkets’ twice-weekly assessment of the aluminium 6063 extrusion billet delivered premium, delivered Midwest US, was 9-10 cents per lb on Friday, narrowing upward from 8.5-10 cents per lb on December 1.

The spot market remained mostly quiet in the fortnight with some deals reported in the 9-10 cents per lb range.

Market participants assessed the premium at 10-12 cents per lb, with one producer source saying anything below those numbers would make business not sustainable.

Sources said the 2024 long-term contracts for billet material were either concluded or in conclusion phase, and that they did not expect much change to the premium until the end of the year.

To understand the complex market conditions influencing price volatility, download our monthly base metals price forecast, including the latest copper price forecasts today. Get a free sample.



This article was originally published by a www.fastmarkets.com . Read the Original article here. .