London (Platts)--29Nov2012/720 am EST/1220 GMT

The European physical aluminum market has seen little spot activity in the past week, but buyers and sellers are continuing to negotiate and finalize contracts for 2013.

"We have done some deals for next year and I've never seen such a spread in offers. I've been offered premiums in a range of $25 from the lowest to the highest," one consumer said.

He said that he had booked a deal for 5,000-10,000 mt across 2013 with fixed premiums at $280/mt on a duty-paid basis plus LME cash.

However, he added that he had also been offered deals as high as $300/mt.

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"People are still cautious, but at some point you have to buy," the consumer said.

He added that he had booked some small quantities on the spot market at $290/mt for duty-paid material plus LME cash.

He said buyers were reluctant to take large tonnages on a fixed premium for next year and that nobody in the market was looking to rush into deals to secure material.

"Generally people do not want to expose themselves to unnecessary risk," he said.

A trader said he had sold some volumes for next year and added that premiums were still firm.

He said he had sold a few thousand tonnes with premiums around $225/mt duty-unpaid and had achieved premiums in a range of $290-295/mt for duty-paid for some contracts in the first quarter of next year.

However, he said most buyers had opted for floating premiums and that he had only achieved fixed priced terms for the first quarter.

"Floating contracts are always on the table and are welcome from both sides. It allows us to hedge our risk," he said.

A producer said the spot market was very flat, but that he had booked a few deals for the first quarter of next year.

He said he had booked for next year at a similar level to the current spot market with duty-paid at $285/mt and duty-unpaid at 220/mt plus LME cash.

A second producer said he had been selling a little bit on the spot market recently.

"We've sold a bit of material in southern Europe around $285/mt for duty-paid plus LME cash," he said.

A second trader said he had done a lot of deals for next year and that spot premiums were as high as $235/mt for duty-unpaid and $300/mt for duty-paid material plus LME cash.

"Demand is still OK. I don't think premiums will fall unless there are some significant changes to the way the market operates," he said.

The second producer said premiums were firm, but added that there was a lot of caution in the market, with some customers expecting the first half of next year to be tough.

"A lot of people are waiting and buying at the last moment," he said.

Platts premium assessment for duty-paid Good Western was unchanged this week at $280-295/mt, in-warehouse Rotterdam plus LME cash.

The premium assessment for duty-unpaid Good Western was also unchanged at $225-235/mt plus LME cash, in-warehouse Rotterdam, as was the premium for A7E at $225-235/mt plus LME cash, duty-unpaid in-warehouse Rotterdam.

The premium for A7E FOB St Petersburg remained at $200-210/mt from last week plus LME cash.

--Greg Smart, greg_smart@platts.com
--Edited by Jonathan Fox, jonathan_fox@platts.com

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