Japan's auto aluminum extruders seeking overseas buyers to boost output

Japanese producers of aluminum extrusion for automotive components were seeking buyers in overseas markets so that they will be able to maintain their output levels, mill sources said Friday.

In July, production hit a high last seen in October 2008. Japan's 69 rolling plants produced 12,536 mt of aluminum extrusions for the auto sector in that month. The high output was attributed to the Japanese government's subsidy program to promote sales of fuel-efficient cars, according to Japan Aluminium Association.

Japanese rolling mills fear that their output would have to drop after the subsidy program ends possibly this month, the sources said. Toyota Motor told its component suppliers last month that Japan's October passenger car output may possibly fall by 20%, component suppliers said.

With the expected drop in domestic demand of aluminum extrusions for auto components, the rolling mills were forced to seek overseas demand, mill sources said.

Of the July output, half was for heat exchangers and fin parts used for engine and air conditioning systems, and the rest was for window frames, door steps, seat belt buckles among others, they said.

The auto market is expanding in Southeast Asia and India, and consumers would want cars with air conditioning systems due to high temperatures, fueling demand for aluminum extrusions, said one source.

In addition, stricter emission regulations in Europe require engines to have efficient heat control systems, and these would require aluminum, further boosting demand for aluminum extrusions. "But the eurozone crisis has slumped demand there," the source added.