S Korea's Hyundai Motor to boost vehicle output in Q3 to recover strike losses

South Korea's largest automaker Hyundai Motor plans to boost vehicle production in the third quarter to recover production losses resulting from strike action over March-May, industry sources said Tuesday.

Workers at Hyundai's Ulsan plant went on strike on weekends from March 9 in a dispute over wages. The plant had been operating on weekends in the first quarter due to strong demand, a company spokeswoman said.

Normal operations resumed May 25, but a production loss of 83,000 vehicles was attributed to the strike, the spokeswoman added.

The company has since boosted output to meet its goal of producing 1.4 million vehicles at the Ulsan plant in 2013, sources said.

"Diecast aluminum requirements by Hyundai for April-June were down 30% from expectations due to the strike. For July-September, the automaker plans to boost output to make up for the losses," a secondary aluminum alloy smelter source said.

Hyundai Motor last week closed a tender to buy secondary aluminum alloy for deliver over July-September and is expected to announce the results next week. However, due to an unexpected reduction in Hyundai's demand in Q2, South Korean secondary aluminum smelters have built up stocks, and are mulling whether to reduce output or increase sales in overseas markets, sources said.

But a source at a smelter with over 6,000 mt/month output said ADC12 aluminum alloy prices in South Korea are around $2,200/mt, higher then elsewhere in the region.

"Exports are difficult as overseas buyers are not accepting Korean prices," the smelter source added.

A Japanese trader said his latest spot purchase last week was at $2,170/mt CIF Japan for 200-300 mt of Chinese-origin ADC12.