Europe Al: Alloy prices slip as sentiment shifts

European aluminium alloy prices started to slip over the past week as sentiment soured for the fourth quarter, after major consumers began enquiring for deliveries over the rest of the year and suppliers were surprised by how low their demand volumes have become.

"We had the impression that prices would recover and be higher in September, but that opinion changed last week with the enquiries and tenders we saw," one producer said. "The big consumer volumes are much lower for the fourth quarter than last year, and we now think there will be a downturn in prices."

The producer added that the volumes some large consumers in Europe were asking for had contracted by around 20pc year on year.

Argus assessed DIN 226 diecasting alloy at €1,320-1,380/t ($1,465-1,531/t) on a delivered basis today, slipping from €1,330-1,380/t a week ago.

DIN 231 alloy stayed flat at €1,380-1,440/t, but DIN 230 alloy fell to €1,750-1,800/t from €1,790-1,840/t, and DIN 239 alloy decreased to €1,740-1,800/t from €1,790-1,840/t.

Some consumers have postponed deliveries under existing contracts as demand pulled back, driven in part by a tough automotive market this year.

"Everyone's getting postponements on their contracts," a trader said. "We had contracts for the second quarter that are still being postponed."

In the UK, the Argus weekly LM 24 diecasting alloy assessment was unchanged at £1,200-1,250/t ($1,457-1,518) today, with LM 25 alloy prices staying at £1,580-1,650/t. But LM 6 alloy rose slightly to £1,610-1,690/t from £1,600-1,680/t, after some small deals were reported at the top of the new range.