Nippon Light Metal will increase selling price of aluminum hydroxide and alumina products by 10-20% for shipment on March 1. This is the first price hike for aluminum hydroxides and alumina products in recent three years. The price increases by 5 yen per kilogram for common grade aluminum hydroxide, by 15 yen for special aluminum hydroxide and by 20 yen for alumina and alumina based products.
Nippon Light Metal produces aluminum hydroxide and alumina products at Shimizu plant in Shizuoka, Japan. The firm melts and leaches imported bauxite to extract aluminum hydroxide and bakes aluminum hydroxide to process alumina products. Red mud (bauxite residue) has been disposed into the sea. However, Japanese government recently showed a policy to terminate red mud disposal into the sea until 2015. Along the governmental indication, Nippon Light Metal presently uses imported aluminum hydroxide jointly with bauxite. The company will finally terminate bauxite refinement in Japan and substitute aluminum hydroxide for bauxite. Meanwhile, procurement cost is higher for aluminum hydroxide than for bauxite. Additionally Nippon Light Metal needs to carry out total 8 billion yen capex to convert productive facilities in Shimizu plant. Procurement costs also maintains high for substantial materials and fuels such as caustic soda, natural gas and heavy oil. The company’s profitability has been impacted in recent years. Nippon Light Metal estimates Japanese market of aluminum hydroxide and alumina at total 600,000 tonnes per year (alumina base). The firm holds almost 50% market shares in Japan.
