Japan Recovering Demand for Offshore Secondary Al Alloy Materials

Japanese automotive parts makers show appetite for offshore secondary aluminium alloy materials, Chinese AD12.1 grade alloy and Russian AK5M2 base metal. Japanese auto parts makers had minimized procurement of offshore secondary aluminium alloy materials since November mainly due to the output reduction of impact by the flood in Thailand. However, Japanese automakers currently announced they plan to increase automobile production by 10-15% year-on-year during December-February. Auto parts makers are likely to increase their production along automakers’ output expansion.

Chinese major secondary aluminium alloy maker, Shanghai Sigma Metals presently offers CIF US$ 2,270 per tonne for AD12.1 grade alloy against Japanese customers while Ye Chiu Metal Recycling (China) offers US$ 2,200. The offer prices are slightly higher than the level in late November but many Japanese users feel the prices are still reasonable thanks to historically high yen trend.

Japanese demand is also recovering for Russian AK5M2, one of main materials for secondary aluminium alloy production. The backgrounds are that Japanese automakers are increasing the productions and that domestic base metal supply maintains short against the demand. The present offer price is C&F US$ 2,080-2,100 per tonne against Japanese users, which is US$ 100-120 higher than the recent bottom price in November.