Supply of waste automotive engine, which is raw material for ADC10 grade of secondary alloyed aluminium ingot, increases around Tokyo. The alloy makers’ profitability is still severe due to still higher purchase cost of the engine while the alloy selling price keeps decreasing.
An alloy maker source said the engine purchase volume would reach 2,000 tonnes in June compared with monthly 1,000 tonnes level through March. The alloy maker keeps full capacity operation while the operation rate was around half due to shortage of the material before. The engine supply started to increase around April when higher sales for new vehicle pushed up old car supply. Higher scrapping car number represents higher supply of waste engine. The engine price is still high despite of 4-5 yen per kilogram drop in May. An alloy maker source said without 5-6 yen lower engine cost the maker cannot make money when the alloy selling price decreased by more than 10 yen per kg since April. The engine supply would decrease in summer. The alloy makers try to build the inventory before summer. The higher demand supports the high engine market price. The market price of secondary alloyed aluminium ingot is 169-171 yen per kg as early June. A maker said the market price hit bottom but without lower engine cost the makers cannot make money.
