Japan Secondary Al Alloy Shipment Downs by 2-digit in Oct

Japanese secondary aluminium alloy ingot production decreased by 10.4% to 90,683 tonnes in October from a year earlier while the shipment declined by 11.1% to 91,182 tonnes, announced Japan Aluminium Alloy Refiners Association on Monday. Both output and shipment represented the first 2-digit minus since January 1999.

The shipment decreased by 14.6% to 49,345 tonnes for die casting products and downed by 9.1% to 25,034 tonnes for casting products. The demand is weakening mainly from automobile related industries. Another negative factor is that cheaper secondary aluminium alloy ingots are continuously imported in large quantity.

Domestic secondary aluminium makers widened their output reduction range after November. The makers seem decreasing their outputs by 20-30% compared with the same month of 2007. The demand is expected to become even worse.

With the sharp decline of aluminium scrap price and the weak demand for secondary aluminium alloy, domestic alloy makers’ selling price would significantly lower. Actually, a market source said some makers seem selling the ingot at rather cheap price to gain cash at present. Alloy makers’ profitability are worsened by low operating rate and low ingot price.