European aluminium foundry market sees headwind due to subdued domestic automotive production

Analysts from Fastmarkets have reported a slowdown in aluminium consumption in the European automotive industry, underpinning muted economic factors. A considerable decline in automobile production due to the ill effects of the cost-of-living crisis has resulted in reduced applications of lightweight metal, according to Fastmarkets analyst James Moore.

Kirstine Veitch, principal consultant at Fastmarkets, also explained:  “The real issue is the low level of vehicle output in Europe. While automotive output remains depressed, the European PFA sector will remain challenging.”

The effect of the decreased production of automobiles is also seen in the premiums of primary foundry alloy (PFA), which is primarily used in automotive parts. According to Fastmarkets data, premiums for aluminium primary foundry alloy silicon 7 ingots delivered duty paid (ddp) in Germany were approximately $500-520 per tonne as of Friday, August 9, compared to $600-650 per tonne on August 11, 2023, and down from the peak of $950-1000 per tonne on June 10, 2022.