Fuel, Metallic Si Cost Impact Secondary Al Alloy Maker

Japan Aluminium Alloy Refiners Association appealed for understanding of higher fuel and material costs at secondary aluminium alloy makers on 25 June. The association explained the costs for heavy fuel oil A and metallic silicon to produce 1-tonne AD12.1 grade alloy almost doubled in June 2008 compared with April 2005. The alloy makers are suffered from worse profitability since they have failed to pass higher productive costs on the alloy price.A Japanese dealer source said the import price of Chinese metallic silicon is around US$ 2,200 per tonne for July-September. About 90% of Japanese metallic silicon import comes from China. The import price downed by about US$ 100 from the previous quarter but almost doubled compared with July-September 2007. Another dealer source said the recent spot price is exceeding US$ 2,300 to reflect the upsurge of coke and electric power prices. Metallic silicon is added at 7-8% content into secondary aluminium alloy.Higher fuel cost also impacts the profitability of secondary aluminium alloy makers. Japanese major alloy makers use recycled oil, which is cheaper than other fuel oils. However, the alloy makers are recently facing difficulties in procurement of recycled oil at enough volumes when paper makers or stone crushers started to use recycled oil as a substitute for heavy fuel oil A. The price of recycled oil soared by 2.3 times in recent 3 years with the demand increase.