London (Platts)--7Dec2012/627 am EST/1127 GMT

Sellers of standard grade 226 aluminium alloy pushed through some small price increases in Europe this week, backed by stronger metal prices on the LME in active market conditions.

A number of diecasters were in the market seeking alloy for January, and in some cases, February too. Larger buyers in Germany were achieving prices of around Eur1,690/mt, an improvement of some Eur20/mt after sales reported into a large automotive producer in the Czech Republic at Eur1,670/mt last week. Smaller spot and monthly consumers were placing orders towards the upper end of the Platts price range at Eur1,720-1,740/mt delivered Germany, sources said.

A large German diecaster was in the market for January tonnage Wednesday and was understood to have purchased at Eur1,690/mt delivered, including credit.

A trade source confirmed that he had sold good quantities for the first two months of 2013: "My sales for January delivery ranged between Eur1,700 and Eur1,730 this week. I've sold some quantity for February at Eur1,760."

Last week a European diecaster held negotiations for the majority of its Q1 requirements and was understood to have purchased at around Eur1,660-1,680/mt.

Key aluminum alloy producers in Germany and Italy were, however, pushing for higher prices firmly above Eur1,700/mt this week on the back of continued upside strength on the LME.

"We raised our offer prices to Eur1,750-1,770/mt last week and the LME [primary aluminium] has risen by some $200/mt in two weeks so we're seeing a lot of our competitors increase their prices a little bit," an Italian alloy producer said. Aluminum scrap is the main ingredient for 226 and scrap dealers base their prices on the LME's primary aluminium contract.

A German alloy producer said he had sold some good quantities for January and also for February at between Eur1,720/mt and Eur1,770/mt. "The average sales price this week for us is Eur1,730-1,740/mt," he said, adding that the quantities sold at below Eur1,700/mt came from a few traders or smaller producers in eastern Europe.

The majority of market players see the German spot market in the low Eur1,700s/mt this week, with sales below Eur1,700/mt fast disappearing. The Platts assessment for standard-grade 226 this week increased Eur10/mt to Eur1,690-1,740/mt delivered Germany, including 30 days' credit.

Primary aluminum prices remained strong at above $2,000/mt on the LME. The LME cash settlement price for primary aluminum was $2,109.50/mt Thursday, up from $2,046/mt a week earlier on November 29 and up $212 from $1,897.50/mt four weeks earlier on November 8.

Aluminum alloy's cash settlement price on the LME was $1,985/mt Thursday, up from $1,940/mt a week earlier and a hike of $170 from $1,815/mt four weeks earlier. DEMAND CONCERNS, POOR CAR SALES

Alloy consumers continued to view Q1 2013 demand levels with caution as some expect demand to fall year on year.

"Our Q1 demand will be down 10-15%," said a German diecaster, who said he had experienced lower-than-expected demand even from a customer who supplies the premium car producers.

A second diecaster said he was expecting a fall of 5-7% in Q1 demand but admitted: "We're being cautious about real demand levels."

A European alloy supplier said some of his customers, especially those who supply the mass car industry such as PSA, Fiat, Opel and Ford, had reduced alloy demand by 5-10% compared to diecasters that made parts for premium auto producers such as BMW and Daimler, who expected an increase in demand of 5%.

European car figures for November -- a key measure of demand in one of the most crucial sectors of Europe's economy -- fell as the economic crisis weighed on sentiment.

In Germany, official data showed some 260,000 new cars were registered in November, a 3% decrease year on year, Germany's VDA said. January-November sales fell by 2% to 2.88 million vehicles.

French new car sales dropped by 19.2% in November on a monthly basis and by 13.8% in the first 11 months of the year, data from the French automobile manufacturers association CCFA showed. The CCFA said it expected French new car sales to be down by about 14% for 2012 as a whole.

In Spain, new car sales shrank by 20.3% to 48,155 in November, the Spanish Association of Automobile Manufacturers said. Over the first 11 months of 2012 combined, new vehicle registrations dropped 12.6% from the same period last year.

--Suzie Windsor newsdesk@platts.com --Edited by Jonathan Fox, jonathan_fox@platts.com