Aluminium Billet Premium Spread Narrows Sharply
European extruders buying billet face a smaller premium over duty-paid metal than at the 2026 peak.
Updated on Nov. 3, 2026 in Economic Indicators
The premium that European buyers pay for aluminium 6063 extrusion billet over the P1020A duty-paid Rotterdam premium narrowed to $276.25 per tonne on October 28, 2026. The contraction follows a 2026 supply shock that pushed billet premiums sharply higher, and it matters for European extruders and fabricators whose input costs track billet pricing.
Why it matters
Billet and P1020 premiums rose quickly after the 2026 supply shock, with billet moving most sharply, and the spread has since retraced as that pressure eased. Uncertainty over US-Canada tariffs has also tightened the duty-paid market, so the narrowing reflects both a loosening of billet supply and continued tension in duty-paid aluminium.
The billet-P1020 spread stands at $276.25 per tonne, down 58.2% from its 2026 high of $661.25, while the North Germany billet premium rose 109.1% between February and May 2026 to $1,175.00-1,250.00 per tonne. Market participants put average billet conversion costs at around $300-350 per tonne, up from roughly $250 previously.
The players
Fastmarkets
A London-based price reporting agency whose assessed aluminium premiums, including billet and P1020A duty-paid benchmarks, are widely used as reference prices in physical metal contracts.
London Metal Exchange (LME)
The world's leading exchange for trading base metals, whose warehouse inventory data is closely watched as a gauge of aluminium supply and demand.
The details
Higher billet premiums draw billet from a wider range of origins into Europe and encourage more domestic European production, which increases available supply and pulls the premium down. The spread compresses when the billet premium falls faster than the duty-paid P1020A premium. For buyers, conversion costs of around $300-350 per tonne sit on top of the metal price, so the premium they pay for billet over duty-paid metal is a central part of extrusion input costs.
Timeline
February 27, 2026: North Germany billet premium at $560.00-600.00 per tonne.
May 29, 2026: North Germany billet premium assessed at $1,175.00-1,250.00 per tonne.
August 7, 2026: Billet-P1020 spread reaches its 2026 high of $661.25 per tonne.
August 21, 2026: P1020A duty-paid premium falls to $460.00-500.00 per tonne.
October 28, 2026: Billet-P1020 spread narrows to $276.25 per tonne.
Market Landscape
The current narrowing echoes the 2021-23 contraction, when the billet-P1020 spread fell 75% to $300 per tonne by February 2023. LME aluminium inventories, at 231,675 tonnes on October 29, 2026, sit far below the 913,200 tonnes recorded on December 10, 2021, which leaves the duty-paid market comparatively tight.
European buyers of extrusion billet should factor the narrower spread into near-term purchasing and pricing discussions, while still budgeting for conversion costs of around $300-350 per tonne. Fabricators who source duty-paid metal should monitor US-Canada tariff developments, since they could reshape P1020 availability and the duty-paid premium.
The takeaway
The key operating signal is that billet pricing is moving faster than duty-paid metal, so the spread is now a more useful indicator of input-cost direction than the headline aluminium price alone. Procurement teams should track the billet-P1020 spread and LME inventory levels weekly, and watch any US-Canada tariff decision for its effect on duty-paid availability.
Further reading
For broader context on the price signals behind this move, explore Economic Indicators.
