UBC Market Price Rapidly Decreases in Japan

The market price of used beverage can (UBC) is rapidly decreasing in Japan. Japanese major aluminium can recycler reduced its UBC purchasing price by 20 yen per kilogram for arrivals on and after 14 October. The recycler is expected to cut the price by additional 30 yen per kg for arrivals after 20 October. The price would plunge down by total 70 yen per kg within October.

The aluminium can recycler seems to hold much UBC inventory since the recycler had purchased UBC at the high price. Japanese secondary aluminium makers are likely to follow the price cut and to reduce their UBC purchasing price by 20-30 yen per kg at least for the second half of October.

UBC users are minimizing their procurement when primary aluminium price is sharply decreasing and the demand for secondary aluminium products is remarkably weakening. Japanese aluminium can material makers seem decreasing utilization of re-melted scrap ingot (RSI) while increasing consumption of primary aluminium ingot, when primary aluminium price is at the cheapest level since October 2005.

A trader source said Japanese major can material makers are actively purchasing primary aluminium futures and domestic demand for RSI is likely to decline more toward the end of this year.

Demand for UBC is also weakening from secondary aluminium alloy and deoxidizing agent along with global economy slowdown. UBC supply became surplus in Japanese market.