Surging Japan Aluminium Products Prices

Japanese primary aluminium ingot price surges. The price reached more than 340 yen per kilogram, which is the highest level since January 1989. With the higher price, the market expects higher prices for rolled light metal products. The rolled products makers try to pass the higher cost price to the selling prices. However, some concern the users seek alternative materials under the surging aluminium ingot price. Aluminium ingot future price surged to US$ 2,600 per tonne at London Metal Exchange in the month and keeps firm. A Japanese major trading firm expects the price could increase to US$ 2,700. The yen value of aluminium ingot accelerates to increase when the foreign exchange rate decreased to 120 yen per US dollar at telegraphic transfer selling rate. The Japanese ingot price increased more than the standard price at 280 yen per kg for January-March, which increased by 30 yen from previous quarter. The price could increase more after April. With the higher ingot price, Japanese aluminium rolling makers and aluminium foil makers try to increase their selling prices by reflecting the higher ingot price under the existing price mechanism and by introducing new mechanism for other products to pass the higher cost price. The rolled aluminium industry try to pass at least the higher ingot cost price when the industry expects their industry wide cost will increase by 6-7 billion yen including higher oil price. However, the ingot price is expected to increase more after April than increase in January. Some rolled aluminium makers concern users shift to alternative materials due to the higher aluminium price though automobile uses more aluminium. The surging aluminium price would reduce the demand though prices also increase for other materials including steel and plastics.