OREANDA-NEWS. Market prices for 226, Europe's key grade of aluminum alloy, have edged up this week by around €10/mt ($11/mt) following an intense round of third-quarter buying over the past two weeks.

The weekly assessment by Platts of standard 226 grade increased by €10/mt to €1,590-€1,640 ($1,807- $1,864)/mt delivered Germany, including 30 days' credit, on June 3 from €,580-€1,630/mt on May 27.

Spot indications for 231 grade increased by €20/mt to €1,620-1,670/mt delivered Germany, plus credit, from €1,600-€1,650/mt a week ago.

Large-mid-sized Q3-buyers stepped in to secure high volumes at around €1,580-€1,590/mt delivered at the end of May, and diecasters this week found the lowest offers were higher at €1,590-€1,600/mt delivered as sellers attempted to widen profit margins.

One monthly buyer bought July delivery 226 at an average price of €1,600/mt delivered. The low end was heard at around €1,585-€1,590/mt delivered, market sources said.

The same buyer also secured 231 grade at an average price of €1,630/mt delivered, with the lowest sales heard at €1,615-€1,620/mt delivered.

A third-quarter buyer who was negotiating volumes this week said that offers were initially at €1,600/mt and above, but that they were seeking to achieve prices of €1,570-1,580/mt delivered following negotiations.

"I sense that there is a big fight between the smelters for business," he said, adding that the most competitive offers at below €1,600/mt delivered had come from East Europe and also from Germany.

He said that the south European producers were not competitive at present, offering at between €1,600-€1,650/mt delivered, possibly because the local market demand in Italy and Spain had picked up.

A German trader said that it was difficult to trade at €1,570-€1,580/mt delivered. "We just can't compete at these levels," he said, adding that he was looking to sell to smaller customers who were willing to pay higher prices of around €1,650-€1,660/mt delivered.

Offers from the UK were still unworkable for larger German buyers at €1,580/mt ex-works, the trader said. On the supply side, the larger European producers in both the East and West of Europe say that ingot sales prices below €1,600/mt are continuing to squeeze profits.