Japan Aluminium Ingot Price Increases to 330 yen/kg in April-June

Japanese aluminium primary ingot price increases to 330 yen per kilogram for April-June when the indicative ingot price increased by averaged 50 yen for December 2005-February 2006. The ingot price increases more than 30 yen of hike for January-March. Domestic market price of aluminium rolled products is expected to increase in the distributors market when domestic aluminium rolling makers decided to pass the higher cost of ingot on the selling price. The aluminium ingot price increased to more than US$ 2,000 per tonne and reached US$ 2,600 temporally in February at London Metal Exchange in December-February, which is base of Japanese ingot price for April-June. The LME price increased to more than US$ 2,400 at the end of last week after the temporally decrease. The foreign exchange rate of yen decreased to 120 yen per US dollar at the end of 2005 though the rate increased recently. The lower yen rate increased the domestic aluminium ingot price. Domestic aluminium rolling makers will pass the higher ingot cost price on the selling price. They increase the selling price in accordance with the ingot price except for some products with negotiation based price. Domestic distributors of aluminium rolled products will try to pass the higher price on the re-selling prices. A distributor in Tokyo said the firm cannot absorb the higher cost and the firm tries to persuade the customers as soon as possible. They try to seek another round of price hike after they increased the re-selling price for almost all customers to pass the higher ingot price for January-March. Some sources said the demand will decrease in and after April when some distributors have speculative order from customers, who want to secure materials before the price hike. However, the supply balance could keep firm when rolling makers have no additional capacity to ship more materials.