A white-hot corner of the aluminum market that for months defied a broader slide in metal prices is finally slumping, flashing a warning that major industrial economies are stumbling toward a recession.
“We’re seeing a slowdown in our order intake in the construction sector, and those customers are typically the fastest to react,” said Rob Van Gils, chief executive officer of Hammerer Aluminum Industries, which uses billets to make specialized extruded products. “Other areas like autos and electronics are still healthy, but it’s certainly not as hot as it was last year.”
That stockpiling helped inflate premiums and exchange prices for commodities all over Europe as buyers shifted from just-in-time supply chain management to building up reserves in case of sudden shortages. Now, the logistics snarl-ups are starting to ease and consumers are sitting on considerable inventories.
“There are not big inquiries currently because everyone has already bought; now you have billets on the ground and the majority of buyers have stocks more or less up to September,” Grifone said.