Primary Al Price Drops Down in Japan

Japanese domestic price for primary aluminium ingot is widely decreasing to 340-345 yen per kilogram to reflect the plunge down of overseas aluminium market at the end of last week. The latest price downed by about 30 yen per kg compared with the monthly average in July. The price seems not to continue decreasing even wider since the actual demand is expected to recover around the bottom price.

Primary aluminium 3-month future price at London Metal Exchange dropped down to US$ 2,600-2,650 per tonne on Friday from over US$ 2,800 level in July. Additionally the exchange rate of yen recently turned strong against US dollar after the underlying weak trend. Japanese domestic primary aluminium price might decrease more in October-December compared with the previous quarter.

However, some traders expect LME aluminium price could be supported at US$ 2,600 in near future, even though the market seems to turn into downtrend in long term to reflect the supply and demand balance. Actually LME aluminium transactions represent the sharp increase in a few days. The actual demand is likely to recover when LME aluminium price continue decreasing.