Japan Secondary Al Industry Reduces Russian Base Metal Procurement

Japanese secondary aluminium alloy makers and aluminium melt suppliers are decreasing purchasing volume of Russian AK5M2 grade base metal. Russian base metal producers offered the yearly highest price at CIF US$ 2,250 per tonne against Japanese users in early March. The offer price keeps the high level at around US$ 2,200 at present. The higher offer price reflects tight supply of aluminium scrap in Russia in winter.

The current offer price equals to 189-192 yen per kilogram for Russian base metal, which is 7-8 yen higher than Japanese base metal price. Thus Japanese users are decreasing procurement volume of Russian AK5M2. One Japanese trader said they reduced the contract volume by about 30% for March compared with January-February level.

The users prefer Japanese ADC10 grade base metal. The current market price is around 182-183 yen per kilogram. However, the supply is tight due to low generation of automotive engine scrap.

Japan Aluminium Alloy Refiners Association announced on Friday Japanese domestic demand for secondary aluminium and aluminium alloy is forecasted to increase by 1.7% to 1.508 million tonnes including imported ingots for fiscal 2012 starting in April from fiscal 2011. The shipment for casting is expected to increase by 1.3% to 274,900 tonnes while the shipment for die casting is forecasted to increase by 2.2% to 916,800 tonnes.