Financial Intelligence firm predicts stagnant growth in European aluminium billet market for 2024

According to a report published by S&P Global, an American publicly traded corporation headquartered in Manhattan, the European aluminium billet market labelled 2023 a year of demand deflation and hesitant purchases. A buyer said the poor demand for aluminium billet was due to a depressed mechanical engineering market, adding that stocking would not increase much for meagre expectations for Q1 2024.
Financial Intelligence firm predicts stagnant growth in European aluminium billet market for 2024
Through Q4 2023, aluminium billet sellers saw continued dither among sellers for buying the metal and significant delays in negotiations, resulting in continued premium fall and constant pressure on profit margins, with billet prices coming to the lowest level in the past three years.
At the beginning of 2023, the billet premiums were as high as $675 per tonne but later on, descended steadily much below $400 per tonne due to sluggish demand and purchase.
In 2023, a shift in buying practice was recognised. Earlier, customer billet contracts would be negotiated on a quarterly basis, but through 2023, there was a preference for monthly purchases, which further indicated profound hesitancy among buyers.
However, a trader noted that the situation varied from one European region to the other. He said the German market was "a massive issue", with little or no demand compared to Italy.
One producer based out of Europe was of the same opinion, agreeing that "Germany is the leading market for the EU, but there is a lot of concern for their budget, and it sounds like they are running out of money, especially with winter the cost of energy expected to be high."
Throughout the third and fourth quarters of 2023, Germany had less availability of liquid assets than the Italian market, with numerous sellers lacking clarity on the industry dynamics of the region and limited insights from extrusion buyers.
Some market sources suggest a slight rebound in the billet premiums but also recognise that the premium range will remain wider. Platts assessed the 6060/6063 aluminum billet premium at $380/mt DDP Germany, stable on the day, on net 30-day payment terms for prompt-to 60-day delivery on Jan 8. The Italian premium was assessed at LME cash plus $370/mt DDP for net 60-day payment terms on Jan 8.
A secondary billet producer based in Germany said: "Customers are keeping barely any volume in the books and want to stay flexible so are not committing to volumes or as much as we would like. We do expect things to get better and hope they will improve by mid-January, but we are not optimistic, and it will be a difficult Q1."
source：https://www.alcircle.com/news/financial-intelligence-firm-predicts-stagnant-growth-in-european-aluminium-billet-market-for-2024-104579