Osaka AD12.1 Alloy Makers Unwilling to Approve 5 Yen/kg Price Cut

Secondary aluminium alloy makers’ selling price of AD12.1 grade die casting alloy is likely to decrease by 5 yen per kilogram around Osaka for June shipment. Aluminium scrap market price has decreased by 13 yen per kg for both high and low grade for recent 3 months. Meanwhile, AD12.1 price had been raised by 6 yen in early April and had been flat or downed by only 1-2 yen so far. The alloy users are requiring price down.

Secondary aluminium alloy makers are unwilling to approve the price cut. Aluminium scrap market price turned weak in late March. On the other hand, the alloy makers’ operating rate dropped to below 40% against the usual level after Japan Earthquake when aluminium die casting end customer of car makers temporarily suspended operations. Consequently, material inventories increased at the alloy makers for both domestic aluminium scrap and imported base metals.

The alloy makers lowered their purchasing price for aluminium scrap and actually regulated material procurement in order to decrease overstocked material. In price negotiations for June shipment, the alloy makers seem to insist that currently produced alloys are not using low cost scrap but overstocked materials bought at high cost.

The price negotiations will finish this week.