JPN Secondary Al Makers Shrink Output More in February

Japanese major secondary aluminium alloy makers, including Daiki Aluminium Industry, Nikkei MC Aluminium and Summit Showa Aluminum, plan to expand output reduction by 5-10% in February. Operating rate at their domestic plants was around 50% in January. They will decrease the production more this month. Sales volume of secondary aluminium alloy is especially dropping around Nagoya where Toyota Motor decided additional reduction of car production. Operation rate would become as low as 40% at some alloy plants in February.

The major 3 alloy makers widened output cut range in January to adjust supply volume along order plunge. They halted domestic plant operations for almost a half of a month in January. However, Japanese automakers are reducing car production more and demand slowdown for secondary aluminium would be prolonged. The alloy makers will adjust the production by additional plant closing by 5-10 days in February.

Japan Aluminium Alloy Refiners Association announced on Tuesday that domestic production of secondary aluminium alloy ingot plunged by 46.5% to 53,125 tonnes in December 2008 from a year earlier while the shipment dropped by 40.6% to 57,735 tonnes. Both production and shipment hit the lowest volumes in 30 years with the widest minus ranges.

The production represented the year-on-year decline for 7 straight months and the shipment for 5 months. The shipment decreased by 41.5% to 31,520 tonnes for die casting and by 47% to 14,042 tonnes for casting, both of which dropped at the widest ranges.

In December, the production was lower than the shipment by 4,610 tonnes (about 8%). Secondary aluminium makers decreased their output to adjust inventories.