LONDON Affinage de Lorraine SAS, the French subsidiary of German foundry alloys producer Aluminiumschmelzwerk Oetinger GmbH, has followed its parent company into insolvency, a source from the company told AMM sister publication Metal Bulletin Aug. 2.
"As a result of the Oetinger insolvency, our French company has applied for insolvency," the source said.
Oetinger went into administration June 26 after months of severe margin pressure, as secondary aluminum ingot prices were kept low by depressed aluminum prices on the London Metal Exchange and tightness in the scrap market maintained high raw material prices. Its four German units were included in the insolvency, but Affinage de Lorraine was not.
Last week, Oetingers administrator guaranteed payments to raw material suppliers through the end of August, and the company resumed offering spot material into the market.
Affinage de Lorraine will now seek a similar guarantee so that it can maintain operations.
"Production is still running, but at a lower level," the source said. "But scrap dealers have stopped deliveries, so we need a guarantee from the administrator."
Affinage de Lorraine produces 50,000 tonnes of foundry alloys per year.
A version of this article was first published in AMM sister publication Metal Bulletin