Japan Secondary Al Makers Offer Price Hike to Cover High Costs

Japanese major secondary aluminium alloy makers including Daiki Aluminium Industry and Summit Showa Aluminum are offering price hike of processing charge against the users such as die casting makers. The hike is unlikely to be approved within June with the users’ strong disapprovals. Secondary aluminium makers are suffered from losses caused from high material cost and low operation rate.

AD12.1 grade alloy price is expected to surge widely for July-September compared with April-June at the supply tender for Japanese major automakers. However, secondary aluminium makers suppose the price up is insufficient to cover rapidly surging material costs. Aluminium scrap market price increased by 10 yen per kilogram for 16-30 June from the first half of the month. At the same time, the ingot makers are facing difficulty to cover fixed costs under the operation rate as low as 60%.

AD12.1 grade ingot price is expected to become around 180 yen/kg in July. The ingot makers claim the moderate price level is at least 200 yen/kg for their profitability. The ingot suppliers will offer price hike by more than 20 yen/kg against the users in price negotiation for shipment in the second half of June.