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Aluminium Demand Slumps in Europe

Industrial aluminium demand in Europe declines. For 2024, new contracts with smelters see delays as concerns of overbuying loom with the recent dip in demand for finished metal products.
In Europe’s “mating season,” companies aim to seal supply agreements for aluminium, vital in construction, transport, and packaging.
“Supply chain destocking is happening. The fear of over-commitment is real,” says a producer at the Fastmarkets aluminium conference in Barcelona. By November, customers may finalize contract tonnages, eyeing the grim European economy.
Germany, Europe’s largest economy, witnessed a larger-than-anticipated drop in its industrial production in July. Eurozone business activity also experienced a sharper decline.
ZED Trading’s Ameera Abdulaziz mentions postponements in shipments due to soft demand. Shipments of alumina to the Middle East and aluminium to Europe, slated for June-July, have shifted to August-September.
BNP Paribas’ David Wilson comments on aluminium billet premiums indicating aluminium demand. “European demand shows no sign of recovery soon. It’s slumping across sectors.” Aluminium billets’ premium has sunk by approximately $1,000 in the last 18 months, now at $500 per metric ton.
In contrast, U.S. aluminium demand remains stable. Aerospace and automotive sectors remain strong, while the industrial and packaging sectors lag.
China, the world’s largest consumer, surprisingly has a strong aluminium demand. This counters predictions of a potential slump amidst economic revival challenges. Electric vehicles thrive in China, compensating for global demand slumps. The government’s push to complete stalled housing projects also boosts demand.