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Japan traders turn to LME warehouse aluminum alloy stocks on lower prices
Edited by : AL CIRCLE
2 min read
Japanese traders are seeking to source ADC12 as well as 226 aluminum alloy stored in London Metal Exchange warehouses, as LME aluminum alloy prices have fallen below physical spot prices, market sources said Friday.
One Tokyo trader said European sellers had approached his company offering physical cargoes of ADC12 aluminum as well as ADC12 from LME warehouses.
"Sentiment is bad there. They don't think German car sales will support the market any more," he said.
A Japanese diecaster source added that his company was interested in European material despite the fact that "the sizes are different. But we need to be flexible, need to learn to use various types."
Japanese diecasters prefer 5 kg ingots, rather than European ingots that are 8 kg or larger.
The LME aluminum alloy settled at $1,951/mt Thursday. There is minimum $150/mt cost for transport, documentation and other administrative fees, traders said.
LME aluminum alloy at $2,100-2,150/mt delivered to Japan is cheaper than buying from the domestic market, where the price is in the range of $2,270-2,350/mt CIF Japan, sources said.
Traders added that out of the 130,860 mt alloy held in LME warehouses, 10-30% are believed to be ADC12 and the rest A380 or 226 specification, which is not used in Japan.
But some Japanese end-users are considering using 226 alloy to replace AK5M2 Russian aluminum scrap feedstock, said another Tokyo-based trader.
Russian AK5M2 with zinc 1%, magnesium 0.5% was offered at $2,080-2,090/mt CFR Japan this week, traders said. So far, AK5M2 sourcing costs are marginally lower than LME alloys, but they are very close, the trader added.
One Tokyo trader said European sellers had approached his company offering physical cargoes of ADC12 aluminum as well as ADC12 from LME warehouses.
"Sentiment is bad there. They don't think German car sales will support the market any more," he said.
A Japanese diecaster source added that his company was interested in European material despite the fact that "the sizes are different. But we need to be flexible, need to learn to use various types."
Japanese diecasters prefer 5 kg ingots, rather than European ingots that are 8 kg or larger.
The LME aluminum alloy settled at $1,951/mt Thursday. There is minimum $150/mt cost for transport, documentation and other administrative fees, traders said.
LME aluminum alloy at $2,100-2,150/mt delivered to Japan is cheaper than buying from the domestic market, where the price is in the range of $2,270-2,350/mt CIF Japan, sources said.
Traders added that out of the 130,860 mt alloy held in LME warehouses, 10-30% are believed to be ADC12 and the rest A380 or 226 specification, which is not used in Japan.
But some Japanese end-users are considering using 226 alloy to replace AK5M2 Russian aluminum scrap feedstock, said another Tokyo-based trader.
Russian AK5M2 with zinc 1%, magnesium 0.5% was offered at $2,080-2,090/mt CFR Japan this week, traders said. So far, AK5M2 sourcing costs are marginally lower than LME alloys, but they are very close, the trader added.
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