FOCUS: Volatility highlights lack of hedging mechanisms in European secondary aluminium alloy market

Fluctuating global prices and erratic downstream secondary aluminium consumption have market participants in Europe wondering how to manage risk through periods of volatility.

Fastmarkets’ assessment of the aluminium pressure die-casting ingot DIN226/A380, delivered Europe was at €2,010-2,040 ($2,391.04-2,426.72) per tonne Friday March 19, down from €2,040-2,090 per tonne the week before.
Although the price is still up from €1,950-2,020 per tonne at the start of the year, the price has already gone through a series of rallies and drops throughout the past three months.
“No one knows what direction the price will run - in recent weeks it dropped and increased, we’ve had €2,100 [per tonne] recently and now it’s weaker. We saw in the past that everything is possible within a few weeks,” a producer in Europe said.

“The movements are so strong, I don’t see any logic,” a secondary aluminium trader in Europe said. “Last month, even two weeks ago, everyone wanted deliveries and now everyone is...

Published

Justin Yang

March 22, 2021

15:13 GMT

London