Tighter Supply and Higher Price for Aluminium Can Scrap in Japan

Supply of aluminium beverage can scrap is tightening in Japan while the supply kept surplus against the demand since March 2007. Secondary aluminium alloy makers are purchasing aluminium beverage can scrap at around 180-185 yen per kilogram with the highest price at 190 yen, which upped by 5 yen in early May due to the tighter supply. Scrap dealer source indicated a domestic trader has exported aluminium can scrap as much as 1,500 tonnes to South Korea for March-May.Japanese aluminium scrap export to South Korea was 220 tonnes in January 2007 which expanded to 15 times as much as a year earlier, according to the trade statistics by Ministry of Finance. The export was 191 tonnes in February, 1.6 times as much as a year earlier, and 526 tonnes in March, 5 times as much as a year earlier.Most of the aluminium scrap export to South Korea seemed used aluminium beverage cans. Scrap dealer sources suppose Japanese aluminium can scrap export increased when the domestic market price declined and the export price became relatively profitable. China is the largest aluminium scrap importer from Japan. However, Japanese scrap dealers cannot export used aluminium beverage cans to China in conflict with Basel Convention. Aluminium can scrap export to South Korea seemed to increase in these conditions. Some sources expect the export expansion may be a temporary phenomenon because the domestic market price surged up after mid May. On the other hand, some dealers suppose the domestic aluminium can scrap price surged up when domestic aluminium re-rollers emerged from inventory adjustment and have increased their scrap procurement. Other sources point out aluminium scrap supply is tightening because scrap delivery from northern Japan did not concentrate in early spring this year due to warm winter. In usual years, scrap delivery from northern regions starts in thawing season and domestic aluminium scrap supply becomes easier.Japanese market price of used aluminium beverage cans seemed to increase in May with these combined backgrounds.