Premiums for aluminum billet have risen in Europe in dollar terms due to the euro/dollar exchange rate and good demand throughout the year.
"The recently strong euro versus US FX rate enables...similar to Q3 euro premiums but in US dollars it is obviously much higher now. This is part of the reason why some are selling at $400/mt," a trader said.
An extruder reported that so far this year demand was good particularly in central Europe which had also supported premiums.
Negotiations for contracts had started earlier than usual, according to a producer.
"Billet is moving up, there are already people trying to book metal for Q4 and even Q1 and Q2 2018," the producer added.
He said premiums for the third quarter stood at $400/mt plus LME, delivered Germany, and believed he could get the same level in the fourth quarter as well.
The extruder said this level was possible but still a bit high.
"Maybe it's possible for spot deals but I don't think for contracts so far," he said. He reported premiums at $380-$390/mt plus LME, delivered Germany, net-30 terms for central Europe and $360-$365/mt plus LME, delivered Italy, net-60 terms for southern Europe.
Market participants' views on southern European premiums were somewhat mixed, with a second trader saying that, even though he was not very active in the Italian market, he thought that demand was still quite hectic.
A third trader said the last premium levels he heard were around $325/mt, delivered Italy, but most market participants thought this level was low and not reflective of the fourth-quarter premiums.
The first trader reported premiums at above $345/mt plus LME, delivered Italy, net-60 terms, while a fourth trader reported even higher levels at $380-$385/mt, same basis.
Billet demand is expected to remain good towards the end of the year, market sources said.
