Japan Secondary Al Makers Use More Offshore Scrap

Japanese secondary aluminium alloy makers are increasing consumption of imported aluminium scrap when domestic scrap generation is remarkably decreasing due to stagnant construction market in Japan under the influence of new Japanese building standard law. Japanese annual demand of secondary aluminium alloy is expected to exceed 1.9 million tonnes in fiscal 2007 ending March 2008 and hit the record for 6 years in a row. On the other hand, aluminium scrap generation seems not to recover by spring of this year in Japan.Secondary aluminium alloy makers are facing difficulties in procurement of aluminium scrap, the main material for secondary aluminium alloy, when aluminium scrap generation is remarkably decreasing due to new Japanese building standard law. Scrap dealer source said aluminium scrap supply would become even tighter in February.One of major aluminium alloy makers in Japan started import of high-grade aluminium cast machine scrap from Europe in November 2007 to cover shortage of aluminium sash scrap. The maker said the import volume is approximately 1,000 tonnes per month which represents less than 10% in the all material consumption volume.Japanese import of Russian aluminium (AK5M2) seems also increasing as a material for secondary aluminium alloy. Japanese AK5M2 import was largely decreasing for October-December 2007. In January domestic secondary aluminium alloy makers are increasing AK5M2 procurement since the foreign exchange rate of yen became stronger against other currencies.