Japan Aluminum Products Price Drops Sharply

Japanese primary aluminium ingot price, which is indicator for light metal market price, is expected to drop sharply in January-March 2009, which is the first drop in 3 quarters. The ingot price will reflect lower international market when the ingot price decreased to less than US$ 2,000 per tonne at London Metal Exchange.

Japanese primary ingot price is expected to decrease by more than 80 yen per kilogram in January-March from October-December. Some industry interests expect the reduction could reach 100 yen.

With the expectation for lower ingot price, market price of light metal products is weak around Tokyo. The users hold the order to find the next trend. The lower price expectation reduces the apparent demand while the actual demand decreases under major output reduction by automakers.

Some dealers reduce the reselling price of light metal products by 40-50 yen per kg in the month compared with October level. A dealer said the firm got cheap offer for flat product with 2 millimeters thick from competitor. Some dealers reduce the reselling price by 30-50 yen for December.