Australia accounts for the highest share of aluminium import by Japan

Japan’s aluminium industry is import based and it has stopped producing primary metal altogether shifting its focus towards value added applications and in secondary recovery. The country is Asia's top importer of aluminium and the premiums for primary metal shipments it agrees to pay each quarter over the London Metal Exchange cash price set the benchmark for the Asia region.

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The two major aluminium product manufacturers in Japan are Kobe Steel and Aluminium and UACJ Corporation who make aluminium plates, pre coated sheets and various rolling products for value added applications. Japanese buyers purchase aluminium via annual contracts as well through spot markets where premiums have dropped to their lowest in more than seven years.

However, most of end-users keep annual purchase volume unchanged to secure stable supply to their production plants.

Japan follows a stable trading pattern for primary aluminium. In the year 2014, imports of aluminium stood at 2.8 million tons. The volume dropped slightly to 2.5 million tons in 2015. In 2016, the aluminium import is estimated to stand at 2.4 million tons.  The drop in import is offset by growing domestic secondary aluminium production or secondary recovery in the country.

Cost from import of aluminium in Japan has however dropped year-over-year. The Cost from import was USD 6 billion and USD 5.1 million respectively for the years 2014 and 2015. In 2016, the cost of import is estimated to be about USD 4.3 million. The drop can be attributed to an oversupply of aluminium in the international markets and the drop in aluminium premiums in last two years.

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The imports are mainly driven by Russia, China, Australia and UAE. Brazil and Saudi Arabia also supply a significant amount of aluminium to Japan. The import from Australia is on a downward trend in last three years. In 2014, Japan imported 5,19,059 tons of aluminium from Australia which dropped to 4,55,945 tons in 2015 and the same is expected to drop further to 3,53,644 tons in 2016. The drop is getting compensated by UAE and China in last two years.