Market participants were worried that the oversupply and lack of demand for products such as aluminium billet will affect P1020 market fundamentals heading into next year. Billet premiums across Europe and in the United States have experienced a steady decline since the fourth quarter of 2018.
“People are worried about the overhang of [value added products],” one P1020 trader said.
The spike in market supply was the result of participants wanting to take advantage of billet premiums, which soared to a three-year high in Europe and an all-time high in the US following a supply panic from US sanctions on Rusal metal in April 2018.
Although, after the US government removed sanctions on Rusal in January and global economic uncertainties began emerging and eating away at demand, consumption of the supply overhang became more difficult in European and US markets.
Since then billet premiums in Europe have fallen to fresh...