Aluminum diecasters hit by Japanese automakers' output cuts in China

Japanese diecasters have been hit by Japanese automakers being forced to cut production in China due to slowing sales triggered by geopolitical tensions, industry sources said Tuesday.

Japan's largest automaker Toyota Motor's September car sales in China fell to 44,100 vehicles, from 75,200 vehicles in August, the company said.

Output at Toyota's nine assembly and engine manufacturing plants in China was expected to plunge due to slow sales. A company spokeswoman said Tuesday some Toyota plants in China had been closed since the week of September 17 but declined to elaborate.

Toyota produced 67,600 vehicles in China in August, according to data from the company.

Meanwhile, Nissan Motor and Honda Motor said their Chinese plants started operating Monday after being closed for the National Day holidays last week, but market sources said their output had fallen too.

"Our plants in China are operating, but if our customers [the automakers] reduce output, we will adjust production accordingly," said a spokeswoman for diecaster Aisin Seiki, which operates 27 plants in China.

A spokesman for Keihin that supplies components to Honda Motor said: "There is possibility of our production being impacted, although we don't know to what extent as it is just after the National Day holidays.

"Operations in Japan will be impacted too because the Chinese plants use some components made at the Japanese plants."

Another Japanese diecaster source said he saw around a 10% cut in the diecasters' run rates for October-December from their planned levels, or 10-20% cuts from July-September.

"Japanese automakers were hit by slowing car exports to Europe and now exports to China are falling," he said. All Japanese automakers, with the exception of Fuji Heavy Industries, have revised down their October-December production plans, he added.

Some Japanese diecasters typically start purchases for January deliveries in October, but this year procurement has been slow as they want to wait until December when automakers finalize their January-March output plans, said traders who import ADC12 aluminum alloy from China.

Chinese ADC12 supplies account for around 30% of Japan's demand.

Separately, Japanese trade and diecaster sources said shipments of Chinese-origin ADC12 alloy from China to Japan had not been impacted by the spat over the East China Sea islands.

Japan imported 26,759 mt of aluminum alloy products from China in August, according to the latest Japanese customs data.