Spot prices for aluminium alloy 226 in Europe slipped lower this week, pressured down by abundant scrap levels and softer primary and secondary London Metal Exchange prices. This was despite the recently moderate pick up in spot demand and a trickle of enquiries for second-quarter material, market sources told Platts this week.

Aluminium alloy 226 ingot was mostly heard at Eur1,930-1,960/mt on a delivered German works basis, with 30-day payment terms, shifting down from Eur1,950-2,000/mt a few weeks ago.

Aluminium alloy was last bid at $2,200/mt at 1051 GMT Friday after going untraded Thursday, while primary aluminium was bid at $2,840/mt Friday morning, up $45 from its previous close.

A German trader said the 226 market had been lackluster since the beginning of the year, but over the last few days there had been an increase in spot activity. But he noted that despite this apparent pick up in demand and enquiries, prices had still slid lower. He said 226 prices had dipped Eur50-60/mt in the last few days on the back of abundant scrap levels and a softening in primary and secondary LME prices.

He said the 226 price range was between Eur1,930-1,960/mt on a delivered German works basis, with 30-day terms, and offered prices of Eur2,000/mt "no longer exist."

"If there is a tightening in scrap supply, an increase in LME prices and a big increase in demand, we should see 226 prices climb higher," he said, adding however that such an increase did not seem likely. "Some customers bought too much material in Q4 and have been working off old contracts or stockpiles," he noted.

An Eastern European market source said quotations of Eur1,930-1,960/mt were "probably realistic," but noted that demand was weak and spot activity very thin. "Prices are probably under pressure because the soft winter we have had means there is lots of scrap around," he said, adding that he assumed consumers were running their plants with stockpiled material.

An aluminium alloy buyer said the alloy markets seemed steady and there was no immediate increase in demand expected. "But I have heard that supply of normal scrap is tightening," he said, suggesting that scrap dealers were holding back material in the hope that scrap prices would increase.