DAIKI to Recover RSI Production in March

DAIKI Aluminium Industry, Japanese largest maker of secondary aluminium alloy, will recover its production of RSI (re-melted scrap ingot) in March while the firm has reduced RSI output since the beginning of this year due to worse profitability of the business. Selling price for RSI rebounded largely thanks to sharp upsurge of primary aluminium ingot price after mid February. Profitability of RSI business was improved and DAIKI decided to recover RSI production entering demand season in March.

DAIKI reduced RSI production by 30% in January compared with the previous month. The firm posted loss in RSI business due to higher material costs and lower ingot selling price. In mid February, domestic primary aluminium price soared to 320-325 yen per kilogram, up by 60 yen from the recent bottom in January, to reflect upsurge of overseas primary aluminium market.

Domestic RSI price fluctuates along primary aluminium price. DAIKI’s purchase price for UBC (used beverage can), a material for RSI, upped by 5 yen per kg in the last half of February while RSI selling price rose more. Consequently the profitability improved.

DAIKI decided to raise operation rate at Kameyama plant in Mie, Japan in March. UBC generation tends to increase in and after March every year in Japan. The firm needs to procure enough UBC to recover RSI output volume, while concerned about tighter supply of aluminium scrap in domestic market since spring 2007.