Chinese Consumers Offer Japanese Secondary Aluminium Alloy

Secondary aluinium alloy offers are coming from Chinese consumers to Japanese major alloy ingot makers such as Daiki Aluminium Industry. Chinese demand for secondary aluminium alloy is increasing while Chinese alloy makers are concerned with short supply of aluminium scrap, the main material for secondary aluminium alloy. With these backgrounds, secondary aluminium alloy price is surging in Chinese market. On the other hand, the market price maintains downward in Japan. At present, Chinese market price is temporarily higher than Japanese.

Chinese secondary aluminium makers procure aluminium scrap mainly by import from Europe and USA. In Europe and USA, scrap generation has significantly shrunk due to economy recession since autumn 2008. Chinese secondary aluminium makers are facing difficulty to secure enough scrap from existent sources.

Meanwhile, Chinese domestic demand for secondary aluminium alloy is rapidly increasing thanks to the governmental economy stimulating measures. Operation rate at Chinese large alloy makers, such as Shanghai Sigma Metals and Aluminium Corporation of China, is recovering to 80-90%.

With these factors, Chinese large customers are recently offering as high as near CIF$ 1,600 per tonne to Japanese secondary aluminium makers. On the contrary, Japanese market price is lowering to 130-140 yen per kilogram. Chinese price is being higher than Japanese price.