European aluminum billet spot and second-quarter premiums remained firm throughout March on the back of strong consumer demand, sources said.
"Demand is very good," a trader said, adding that two of his customers had asked for earlier metal deliveries in March, which could indicate they would need extra metal in April.
A Middle-East based supplier said: "Everywhere I go people say let's do business, but we're basically sold out for now."
Another two European billet suppliers said they had also sold out for the second quarter.
"People are looking for extra metal but it's difficult to find it," one European supplier said.
A second trader said: "Customers fear lack of supply so they are trying to book metal for the year."
The second European supplier said he had even secured deals for the third and fourth quarters.
"In Europe we achieved higher premiums for H2 2018," he said.
The first European supplier said Q2 premiums were stable for North/Central Europe at $400/mt plus LME cash delivered Germany and net-30 payment terms. He said he expected premiums to rise in the next quarter.
The second trader said one of their customers in southern Germany had quoted premiums at $420/mt plus LME cash DDP basis, net-30, for the second quarter.
A third trader said he had Q2 deals at a $390-$410/mt premium plus LME cash DDP Central/South Europe for net-30 and net-60 payment terms.
The first supplier said Germany was the most competitive, adding that "for Germany with long finance terms then you are above $400/mt for spot."
The second European supplier reported a couple of forward sales for DDP Poland. Two of them were for Q4 and settled at a premium of $435/mt and $437/mt and for payment terms of net-60 and net-75, respectively. The tonnage was 100 mt/month for the first deal and 50 mt/month for the second.
The supplier had another sale for Q4 at a $450/mt premium plus LME cash DDP Poland, net-75, for 100 mt/month.
In southern Europe, Q2 premiums also moved higher, although the second trader reported hearing some low tradeable values in Spain.
"I heard a premium at $345/mt in Spain for net-30 but I think it's quite low," the trader said, putting tradeable values at $360/mt.
The second European supplier reported selling 600 mt at $362/mt plus LME cash DDP Spain, net-30, delivery starting in April. He also sold 150 mt at a $385/mt premium DDP Spain, net-30 for Q2.
The Middle East supplier reported spot premiums at $375-$385/mt plus LME cash DDP Southern Europe, net-30, and for clips of 400-500 mt.
"I'm sure you could sell a few small parcels at $400 plus, but I would struggle with that number because a big part of that discussion is credit," he said.
The second trader reported having secondary billet deals in Italy at $380/mt plus LME cash DDP, net-60, Q2 delivery.
"There is not much difference with the primary billet market anymore in Italy," the trader said. "We are $10 higher on our premiums for the Italian market compared to the previous quarter."
"I guess the move should be bigger on the primary billet side," the second trader said.
Negotiations for Q3 premiums are expected to primarily kick off at end of April and in May in Europe.
On the 10% tariff imposed on aluminum by US President Donald Trump, most market sources surveyed said they did not expect major disruption in 2018 or a huge change on metal trade flows.
"Primary ingot flows could shift easily but for billets and products is not that easy," the second European supplier said. "Qualification matters so you cannot always be opportunistic."
Other market participants, though doubtful that tariffs would have much of an impact on the market and premiums in 2018, expressed concern about Russian metal diverting to Europe in the long term and how that could affect 2019 contracts.
The tariffs came into effect on March 23.
However, the US government on Thursday confirmed that its pending 25% import tariff on steel and 10% on aluminum would be "paused" until May 1 for steel and aluminum products from the EU, South Korea, Brazil and Australia as well as the previously announced exempt NAFTA partners, Canada and Mexico, until further negotiations take place.
