Secondary Al Alloy Price to Lower for December Shipment in Japan

Japanese major secondary aluminium alloy makers including Daiki Aluminium Industry and Nikkei MC Aluminium try to keep the alloy selling price unchanged for December after the shipment from the previous month. The alloy users are likely to offer the price cut by 5 yen per kilogram or more.

Secondary aluminium alloy makers emphasize they have mainly used high-cost materials procured in November for the products of December shipment.

However, there are many adverse factors for the alloy makers and the selling price is likely to decrease.

Primary aluminium market price at London Metal Exchange decreased to less than US$ 2,000 per tonne on December 19 and kept the yearly bottom level this week. Secondly domestic aluminium scrap market price decreased by 5-10 yen per kg this month. Moreover, import of low-priced China's alloy is increasing under extremely strong yen trend. China's AD12.1 grade alloy is presently traded at 180-195 yen per kg in Japan.

Secondary aluminium alloy shipment is expected to maintain steady when Japanese automakers plan 10-15% year-to-year higher production volume for January-March. However, middle- and small-class alloy makers suffer from low operations due to tough price competition with China's AD12.1.