Shanghai Sigma Metals Shifts to Scrap Sorting by Machines

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Chinese largest secondary aluminium alloy maker, Shanghai Sigma Metals will introduce a shredder machine and a dense medium separation plant in order to lower scrap sorting cost largely. The facilities will start operation in January 2012. The firm has currently suffered labor cost upsurge and worker shortage in Shanghai. Machine sorting costs much lower than human sorting. Sigma Group plans to install these facilities at all of the Group plants.

Mr. Tony Huang, chairman and CEO of Sigma Group, explains labor cost has doubled for recent five years at Shanghai Sigma Metals. Meanwhile, the company is concerned on manpower shortage for sorting of shredder mix metal, one of main materials for secondary aluminium alloy, when high technology industries are currently popular among Chinese workers.

Shanghai Sigma Metals will lower sorting cost by machine utilization while reduce sorting workers to 200-300 people by the beginning of 2012 from present 700 people.

The company purchases a shredder machine from Chinese maker while procures some of the parts from the U.S.A. A dense medium separation facility will be purchased from European maker. Mr. Huang didn’t reveal the investment value. These facilities will arrive at the plant within this year and start commercial operation in January 2012.

Sigma Group’s secondary aluminium alloy production is forecasted to increase by 38% to 550,000 tonnes in 2012 from 2011. In 2012, the Group’s three plants will newly start operation. Chongqing Sigma Metal’s new plant will start in March. Another plant in Shandong Province will enter operation in July. The other plant in Jilin will commence production in September.

Mr. Huang explained the Group plans to increase secondary aluminium alloy export to Japan and Southeast Asia by 30-40% in 2012 and to recover the market share. He gave an outlook that Japanese secondary aluminium alloy market would keep the flat volume in 2012 while demand for Chinese AD12.1 grade alloy is expected to increase.

Japanese secondary aluminium alloy import from China was averagely 31,000 tonnes per month in 2010, according to Ministry of Finance. The average increased to 34,000 tonnes per month for January-August 2011 and exceeded 40,000 tonnes in August. However, Shanghai Sigma Metals’ sales volume has leveled off in Japan. The Group’s market share has downed under severe competitions with other suppliers.

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