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EUROPE ALUMINUM ALLOY: September sales slip below Eur1,800/mt

Tuesday, Aug 13, 2013

Buying activity this week for September delivery has seen spot prices for standard-grade 226 aluminum alloy slip below Eur1,800/mt delivered Germany ($2,403/mt), market sources said.

A German diecaster was understood to have purchased some September quantities of 226 at Eur1,770-1,795/mt and grade 231 at Eur1,810/mt. Sources said they had heard the metal was from southern and eastern Europe.

"I'm surprised that producers were willing to sell at this level especially after Oetinger [key German aluminum alloy producer] went into insolvency after months of low ingot sales prices and squeezed margins," said a trade source.

Another source said that he felt that offers this week ranged from Eur1,770-1,800/mt for large buyers and up to Eur1,820-1,830/mt for smaller quantities.

Secondary aluminum producers are still reeling from the shock of Oetinger's financial woes and have been determined to raise prices to Eur1,800/mt and above to protect profits in the face of high aluminum scrap input costs.

"Prices in Germany still range between Eur1,800-1,850/mt delivered," said one German producer.

A second German seller said that he had a number of inquiries for August and September and that he had sold some 226 quantities at around Eur1,830/mt delivered and 231 at Eur1,870/mt, while a Polish producer said commodity-grade 226 was priced either side of Eur1,800/mt delivered, depending on buyer and volume.

"We're sold out the first week of September," said an Italian seller, who said 226 sales prices were typically around Eur1,820-1,830/mt but could head towards Eur1,850-1,900/mt if secondary aluminum supply is tightened if rumored capacity closures go ahead in the autumn.

Most producers in the UK are fully booked or closed for summer maintenance and traders and consumers say it is currently very difficult to get UK material.

"UK 226 is priced at around Eur1,760/mt ex-works and Eur1,780/mt delivered, which is very much in line with the German market," said a trader.

Offers from eastern European suppliers such as Poland and Slovakia were lower than German suppliers at Eur1,760-1,780/mt delivered, said an Italian producer. And a spot sale of 226 to a Hungarian buyer was heard done at Eur1,770/mt.

Market activity, however, generally remained limited this week as the holiday season has kept buyers away from the market.

The Platts assessment of standard 226 lowered and widened to Eur1,770-1,830/mt delivered Germany, including 30 days' credit, from Eur1,790-1,840/mt the previous week. Spot indications for grade 231 declined Eur20 to Eur1,810-1,870/mt from Eur1,830-1,890/mt delivered Germany.

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