Demand for low carbon aluminum increases P1020 differential

Demand for low-carbon aluminum in Europe is growing steadily, and supply prices for 2023 and beyond are rising steadily, Fastmarkets reported.

Sellers have stated that more and more consumers are now asking for their metal to come from sustainable production and are happy to pay a premium for it.

The numbers for 2023 are very high because people want to provide this metal in the long term.

Other market participants also reported receiving offers for 2023 and beyond, with a difference of $50.

For the surrounding locations, the margin remained slightly lower, but also increased compared to the previous month due to a reduction in supply.

Fastmarkets valued the aluminum low-carbon differential P1020A, Europe, on June 1 at $5-15 per ton, compared to $0-15 per ton a month earlier.

Bids were heard for $10-30 per ton, while the business was heard for $5 per ton.

For the first time since March 2021, when Fastmarkets began fixing difference prices, most market participants agreed that $0 per ton was no longer achievable.

Major P1020A awards also remained high due to continued supply shortages in Europe and continuing logistics problems.

Fastmarkets valued its premium for aluminum P1020A at $590-625 per ton on June 1 last year as compared to $235-250 per ton on June 1 last year.

For value-added products (EAPs), most market participants were able to receive a premium for low-carbon units, but the difference remained unchanged.

Fastmarkets rated the aluminum low-carbon differential, VAP, Europe, at $20-35 per ton on June 1, unchanged month after month.

According to Fastmarkets, the orders amounted to $20-30 per ton of aluminum blanks.

Some manufacturers continued to offer units with differences of $50.

"The need for low-carbon billets and primary foundry alloys is still great, but there is more supply than primary aluminum, so there has not been much movement lately," said consumers.

Base premiums for aluminium billets have declined slightly in recent months due to better availability in Europe and weaker car demand.

But premiums remain historically high, and yet the price for consumers remains expensive.

Fastmarkets valued its premium for its 6063 aluminum extrusion workpiece, ddp North Germany, at $1,470-1,540 per ton on June 1, compared to $1,500-1,570 per ton in early May.