Market and product
Europe aluminum alloy: Market prices and volumes steady
"Volumes are stable this week," a German alloy producer said, adding that demand had been very strong so far for the fourth quarter.
"We are fully booked for October and November delivery and we can deliver small quantities for December," the producer said, noting that he had sold 226 to a mid-size buyer at the upper end of the current price range at Eur1,840/mt delivered.
A German trader said the market had been relatively quiet with just a few requests for November/December delivery.
"The LME fell back this week because of worse-than-expected economic indicators from the US, which then affected Europe too, so that keeps buyers away from the market," he said.
Meanwhile, an Italian seller said the mood in the market was still positive after good demand levels in Q3 were expected to continue throughout Q4.
Volumes from marginal producers were extremely limited and this was keeping spot market prices stable at either side of Eur1,800/mt ($2,308/mt) delivered plus credit, he said.
"Demand is high and producers in Poland and Italy now have good demand in their domestic markets so this could cause some problems in delivering to Germany," warned a second German seller.
One key diecaster was seeking offers for next year, including annual, bi-annual and quarterly contracts either based on the LME or other indexes.
The buyer was expected to conclude some of its business by the middle of October. "We are seeing offers at between Eur1,790-1,810/mt delivered for Q1," he said.
A second trader said market prices remained at either side of Eur1,800/mt delivered, though the LME was under pressure this week and the US dollar fell against the euro to $1.28 from 1.26 a week ago.
"The LME [primary aluminum] price in euro terms is now lower but this has not had any affect on scrap or 226 yet," he said.
The Platts assessment of the standard 226 grade spot price remained unchanged this week at Eur1,790-1,850/mt delivered Germany, including 30 days of credit.
Spot indications for 231 grade were also unchanged at Eur1,830-1,880/mt delivered Germany.
DEMAND FOR Q1 LOOKS POSITIVE
Demand levels for next year were uppermost in everyone's minds as producers and diecasters prepared schedules for December and Q1.
"The latest car figures are extremely positive and we expect to see the larger car producers generally predict stable volumes for next year," said the first German alloy producer.
There is, however, a concern over the Ukrainian and Russian car markets as production and sales have been affected by the conflict in the region.
Many of the mid- and small-size European car producers such as PSA, Opel, Renault, Ford and Fiat have suffered declining sales in the last few years because of the poor economic situation in the region since 2008/2009, said a market source.
"Many of these auto producers were not cushioned by export volumes unlike the higher end cars such as BMW, Audi, Mercedes etc who have continued to sell outside of Europe during the financial crisis," he said.
A more robust economic situation in Europe is, however, beginning to filter through, with the latest figures from the industry looking much more positive.
Ford's European vehicle sales rose 12% to nearly 130,000 vehicles in September, while share increased 0.4 percentage points to 9.0% -- the company's highest share for any month since March 2012, Ford said recently.
Ford Werke, the German arm of Ford, is cutting back production at its Cologne factory because of lower growth in the second half of the year, however.
"We're adjusting Fiesta production at the plant here [Cologne]. This includes 11 non-production days in the remainder of the year, and we're continuing to monitor the market and match production with demand," a Ford spokesman told Platts Friday.
Ford will slow production of the compact Fiesta model at Cologne to 1,550 vehicles/day, down from 1,850 vehicles/day, he said.
Daily car output in 2013 and early 2014, was around 1,650, he added.
The latest EU passenger car registrations in the EU were up by 6.4% year on year in September, continuing the upward trend which began 13 months ago, European automobile manufacturer association ACEA said Friday. New passenger car registrations in September totaled 1,235,501 units.
Growth prevailed in the major markets of Spain (+26.2%), France (+6.3%), UK (+5.6%), Germany (+5.2%) and Italy (+3.3%).
From January to September, the European market for passenger cars increased by 6.1% compared to the first nine months of 2013.
Significant growth was recorded in Spain (+17.2%) and the UK (+9.1%).
"Likewise Italian (+3.6%), German (+2.9%) and French (+2.1%) markets expanded. New passenger car registrations in the EU totaled 9,572,259 units over the period," the ACEA said.
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