Secondary Al Alloy Price Up by 4-5 Yen/kg, Al Scrap Price Down by 3-5 Yen/kg, Tokyo

Major secondary aluminium alloy makers and alloy users, mainly die casting makers, around Tokyo almost agreed with price increase for AD12.1 grade alloy of April shipment by average 4-5 yen per kilogram. The price hike reflected alloy makers’ cost upsurge for materials, fuels and additive metals. However, alloy makers recognize the hike range is insufficient and aim to offer additional hike for May shipment.

Alloy makers offered price hike by 10 yen for April shipment. Alloy users showed disapprovals against the hike since aluminium scrap market price declined in April and alloy consumption sharply decreased after Japan Earthquake. Finally they almost approved in price hike by 4-5 yen.

Alloy makers’ production cost is presently estimated at 200-205 yen per kg for aluminium melt. Alloy makers recognize the current ingot selling price insufficient to secure enough margins. Additionally, fixed cost rate is rising due to low alloy production after Japan Earthquake. Most alloy makers seem suffered from 40-50% production and sales down after the earthquake.

Aluminium scrap price negotiations between secondary aluminium alloy makers and scrap dealers around Tokyo concluded in price down by 5 yen per kg for high grade scrap and by 3 yen for low grade scrap for May 1-15 shipment. The price down reflected weak trend in overseas primary aluminium market and secondary aluminium makers’ output decline. Many alloy makers decrease scrap procurement volume by 50% or more for May 1-15. One scrap dealer points out some of alloy makers are actually stopping material procurement by requesting cheap price.