Secondary Al Alloy Price Continues Downward, Tokyo

Secondary aluminium alloy price is expected to decline drastically around Tokyo. Local makers’ selling price seems around 305 yen per kilogram for AD12.1 grade at small-lot shipment. The bid price was as low as 270-275 yen per kg at a tender for large-lot shipment to Japanese major motorcycle maker for November-December. The bid price plunged down by 45-50 yen per kg from the previous period, reflecting dropdown of aluminium scrap market, slower demand from automobile industry and sharp increase of cheaper import inflow.

Secondary aluminium makers’ selling price is likely to be cut widely for October shipment to die casting makers. The price negotiation will start next week. Alloy makers try to narrow the price down range when they are suffered from higher productive costs for substantial materials and fuels while they have failed to raise the selling price fully. Another factor is that alloy makers hold much material and product inventory, which purchased at the high prices.

Around Tokyo, automobile production is slowing down more and more. For example, Nissan Motor decided to enhance output reduction at Tochigi plant. Major secondary aluminium alloy makers will continue production cut in November by 15-20% year-on-year. Alloy makers’ profitability might become even worse when the product price is in downtrend.