Nikkei MC Aluminium to Reduce Alloy Output by 20-30% in 2H

Nikkei MC Aluminium expects the alloyed aluminium output could decrease by 20-30% in the second half year to March 2009 compared with same period of previous year. The firm expects the output should decrease under slowing demand when the offshore demand slows recently from high level in the first half. The firm expects the consolidated operating profit will halve for the year ending March 2009 from previous year.

The firm expects the sales will decrease by 9.5% to 139,000 tonnes in the second half from same period of previous year. The domestic sales decreases by 14.6% to 88,000 tonnes while the offshore sales increases by 0.9% to 51,000 tonnes. The firm anticipates the demand could decrease more when the market condition gets worse than expected. The sales estimate could decrease more.

The firm reported the production decreased by 10-15% in September and October from a year earlier when the output was same level at Nagano and Tochigi plants as a year earlier level while the sales dropped in Aichi and Shizuoka plants due to slower activity of major users.

The offshore production kept high level operation in China and Thailand in the first half. However, the order receipt should decrease when the users of wheel makers and automakers announced wider output reduction in November.

The firm reported the consolidated operating profit decreased by 43% to 400 million yen for the half year to September from same period of 2007. The sales volume decreased by 3% to 142,000 tonnes while the price decreased due to competition with cheaper imports from China and South Korea. The firm expects the full year operating profit will decrease by 50% to 700 million yen but the profit could decrease more depending on activity of the automobile industry.