JPN Secondary Al Alloy Output Slows Down in 1H

Japanese secondary aluminium alloy production increased by 0.3% to 561,186 tonnes for January-June 2008 from the corresponding period of 2007 while the shipment decreased by 0.3% to 563,301 tonnes, announced by Japan Aluminium Alloy Refiners Association. The output represented year-on-year increase for 13 half years in a row. The shipment showed y/y down for the first time since the second half of 2001. Supply and demand balance of secondary aluminium alloy is loosing in Japan with the demand decline from automobiles and the sharp in flow of cheaper imports.The shipment decreased by 1.1% y/y for die castings in 1H08 while increased by 2.2% y/y for castings. The shipment decreased by 3.9% y/y for extrusions when the demand weakened from domestic housing market.Automakers have implemented output reduction of knockdown sets including engines and transmissions since January 2008 with the decline of North American auto market. Some of Japanese alloy makers have reduced their production by 5-10% to follow the market condition. The growth is slowing down.Japanese domestic alloy output was also impacted by cheaper imports from South Korea and China. The import sharply increased during 1H08. In April, Japanese alloy production showed y/y down for the first time in late 3 years. The monthly shipment is also in downtrend in and after March.