EU aluminum buyers are facing rapidly rising aluminum premiums. And according to manufacturer information, this trend is expected to continue in the coming months. The shortage of steel in the EU continues. And analysts for the United States also in the near future a new normal in higher steel prices.

Stainless Espresso: Aluminum premiums for EU buyers are rising fast
Stainless Espresso: Aluminum premiums for EU buyers are rising fast

EU aluminum prices face new premiums in the coming months 

The European aluminum market is already extremely tight for semi-finished aluminum products. Many plants are fully booked until the end of the year. Those that still have capacity for the fourth quarter increased conversion premiums by up to 30% in the last few weeks alone. 

Russian export tax continues to drive prices 

A further price driver is likely to be the new Russian export tax on 340 non-ferrous and steel products – aluminum is also affected here. Russia is an important primary aluminum supplier for Europe and Asia. 

Further price increases in the coming months have already been confirmed by manufacturers. 

High aluminum premiums likely until early 2022 

It is therefore likely that the supply situation for aluminum products will continue until the beginning of 2022 due to strong demand, long lead times and scarce availability. 


No relief in sight for EU steel shortage  

After individual supplier countries had already doubled their quotas for certain steel products on the first day of the new EU quotas for the third quarter of 2021, the supply situation in Europe is likely to remain tight.  

This leaves only a few alternative sources for importers and downstream steel consumers. 


Credit Suisse analyst sees plenty of upside for steel  

Credit Suisse analyst Curt Woodworth sees a big event in the rebirth of the US steel sector.  

 US steel prices remain high  

Imports will remain subdued due to the cheap dollar and China’s curbs on polluting blast furnaces, and domestic supply will rise only slowly due to a gradual expansion of electric arc furnace capacity, according to Woodworth, who expects demand from automakers and renewable energy developers to keep hot-rolled coil prices well above $1,000/short ton through 2022.  

Sharp correction unlikely – steel prices new normal?  

Woodworth believes Wall Street is currently ruling out a sharp correction in steel prices, but he also believes this is the new normal.  

Hot-rolled coil prices have more than tripled in the past year, reaching an all-time high of more than $1,800/hr last week.  


Asian steel and stainless steel spot and futures continue to rise  

And today, Chinese spot prices for steel and stainless steel products continue to go up in Asia. On the SHFE, HRC prices have risen steadily over the past few days and are up again today, July 8, 2021, by more than 2%. Nickel is also up more than 1%. Stainless steel futures even by more than 2.6%. 


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