The Aluminum Roller Coaster: Cautious Buyers and Weak Demand in Europe!

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Hey there, aluminum aficionados! Rina Meng here, your go-to gal for all things aluminum. Today, we’re diving headfirst into the wild world of European aluminum deals. Buckle up, my friends, because this roller coaster ride is about to get bumpy!

Picture this: a bustling market, suppliers and consumers eagerly seeking that perfect match, like a scene straight out of a reality TV dating show. But hold your horses, folks, because this “mating season” for aluminum deals is not as steamy as you might think. In fact, it’s more like a slow dance with cautious buyers and weak demand calling the shots.

You see, industrial customers in Europe are playing hard to get. They’re delaying their commitments to smelters for new contracts in 2024, and it’s got the market in a tizzy. Why, you ask? Well, it all comes down to concerns of overbuying. With demand for finished metal products taking a nosedive in recent months, everyone’s got their guard up.

I spoke to a representative of a producer at the Fastmarkets aluminum conference in Barcelona, and let me tell you, they spilled the beans. It turns out that many customers are holding their cards close to their chests, waiting until November to reveal their final tonnages for contracts. They’re like poker players, reading the economic situation in Europe like a pro before making their move.

And can you blame them? The economic climate in Europe is as gloomy as a rainy day in London. Industrial production in Germany, the big cheese of Europe’s economy, fell harder than expected in July. And to add fuel to the fire, euro zone business activity took a nosedive faster than anyone initially thought. It’s like a perfect storm of uncertainty, and buyers are feeling the heat.

But wait, there’s more! Customers of ZED Trading in the UAE are postponing shipments of agreed deals due to the soft demand environment. It’s like a game of musical chairs, but instead of chairs, it’s shipments, and nobody wants to be left standing when the music stops. Some shipments that were originally scheduled for June and July have been pushed back to August and September. Talk about a logistical headache!

Now, let’s talk about those premiums for aluminum billets. They’re taking a nosedive faster than a roller coaster on a steep drop. BNP Paribas analyst David Wilson put it best when he said they’re “at rock bottom.” Ouch! It’s a clear reflection of the lackluster demand for aluminum from end-users. It’s like the demand train has hit a roadblock, and it’s not showing any signs of getting back on track.

But hey, it’s not all doom and gloom. There’s a silver lining in every cloud, right? Greece’s Alumil, a family-owned company that makes aluminum windows and other industrial products, is finding a glimmer of hope in this weak demand environment. When they hit the market to buy billets, it’s like a buyers paradise. They receive quotes within minutes, and sellers are even saying, “Don’t worry about the price, we’ll work something out.” It’s like a dream come true for Alumil!

Meanwhile, across the pond in the United States, things are looking a bit more stable.

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