Secondary aluminum spot prices were wide-ranging this week as 226, the main grade, was thinly traded in the run-up to the Christmas holidays.
"We've seen very few requests in the German market over the past few days," said an Italian aluminum alloy producer. He said that he felt spot prices for 226 had stopped falling and he was offering new sales at Eur1,600-1,615/mt delivered Germany plus credit.
A German diecaster said that he had bought a small quantity of 226 for February delivery at Eur1,560/mt this week.
"Most offers were above Eur1,600/mt at Eur1,620-1,630/mt delivered but I secured some tonnes at Eur1,560/mt," he said, adding that there was very little business being done in the run-up to the holidays.
Business was relatively thin ahead of the holidays but buying interest is expected to pick up a lot in January, said a Polish producer, adding: "Prices are now at Eur1,600-1,630/mt delivered."
One German alloy producer also told Platts that he felt the bottom had been reached and that he expected to see stronger prices emerge in January. A number of producers across Europe have also predicted a similar scenario.
Given the strong demand levels expected in the first-quarter of 2016, market prices could well firm.
"Yes, there are some people still selling below Eur1,600/mt but I sold a small lot of 50 mt to a buyer for January at Eur1,600/mt this week, so I expect to see stronger prices in January," said the German alloy producer.
Expectations among diecasters that prices may firm in the New Year are continuing to grow.
"Most producers think that prices will go up in January... This will be especially true if colder weather arrives as this will bump up scrap prices [the main ingredient for 226 alloy]," said a second diecaster.
Scrap prices tend to rise when cold weather hits as it makes it harder for scrap to exit dealers' yards.
"Scrap prices have already recovered by some Eur50/mt and we are starting to be squeezed on profits again," said the second Italian seller.
Most 226 spot deals were at Eur1,570-1,620/mt delivered this week, he added.
"Buyers could probably find some small quantities of material at around Eur1,550/mt or even pay up to Eur1,640/mt but these are the extremes of the range," he said.
First-quarter buyers have already booked large quantities for the first few months of the year, which is underpinned by high levels of production in the car industry in Europe.
"Q1 volumes are quite good. Prices are beginning to stabilize but haven't really increased yet as there are still a lot of players keen to sell," said the second Italian producer.
The German alloy producer confirmed, too, that the car industry was producing at full speed into the first quarter. Indeed, market sources have predicted 2015 aluminum alloy demand to grow at 5-10%, up from 2014 levels.
"Europe's car industry is running well. The economic situation is much better than expected, especially in Italy," he said.
Platts' weekly assessment of standard 226 grade widened at the bottom end of the range to Eur1,560-1,630/mt delivered Germany, including 30 days' credit, from Eur1,570-1,630/mt the previous week.
Spot indications for 231 grade were also wider at Eur1,600-1,660/mt delivered Germany, from Eur1,610-1,660/mt the previous week.