Aluminium scrap market March/April 2024

Aluminium scrap market March/April 2024

Each of us can observe very strange situations on the aluminium market in Poland. There was a time when the LME and the euro were cheapening and the price of aluminium scrap in Polish foundries was rising. This situation was caused by the fact that Polish foundries stopped buying aluminium scrap with reference to the LME, but were instead buying under contracts signed with their customers.
In contrast, recent days have seen a significant increase in LME Aluminium (up ~€70) However, this has not translated into price increases for aluminium in our foundries, prices even have fallen to ~£100-200/t on the most popular sorts. This is another example that our foundries do not buy on the basis of LME prices, but on the basis of concluded contracts.

What we can expect in the near future.

In my opinion, prices at Polish foundries will remain stable or fall. It all depends on the supply of aluminium scrap. As of today, the amount of scrap available on the market exceeds demand. Some foundries signing contracts today are reserving delivery for distant dates (May), other foundries are stopping/restricting purchases (casting/rim/offset).
Polish foundries fighting for automotive customers have signed contracts for the second quarter, which in my opinion are only good for the automotive market. If the LME rises then, relative to the LME, aluminium scrap in Poland will cheapen and our foundries will find it difficult to buy scrap at prices that will allow them to make money on their own production.

What we can expect in the near future.

The situation is different for European plasters, especially foundries working on LME-based contracts. In their case, prices should improve and aluminium scrap will start to flow again towards Western Europe. After months of restrictions on purchases, Italian, Austrian, Spanish and German foundries are starting to turn up the volume, giving prices that are attractive in relation to the Polish market.
The Turkish market, which is increasingly starting to penetrate the Polish Al market by offering better and better prices, also seems to be interesting.