Japan Quake to Impact European Al Alloy Market

European market players increase the concern for potential lower demand of secondary alloyed aluminium. A Switzerland based trader source said BMW and other European automakers cannot secure parts supply from Japan and the alloyed aluminium industry concerns the automakers could reduce the operation rate due to the parts issue. European alloy market price could decrease when Russian alloy makers would divert the metal from Japan to Europe.

The trader source said European automakers kept high level operation recently under the strong recovery of European economy. The higher automobile production increases the aluminium alloy demand. However, Japanese major earthquake impacted on parts supply from Japan to Europe. The trader said the alloy industry expects automakers would reduce the output due to the parts issue.

The source said European alloy aluminium market price would turn into weak in 1 or 2 months when the supply gets loose with the slower demand and higher import from Russian suppliers. The source said Japanese buyers stop buying Russian AK5M2 metal after the quake and the Russian suppliers try to increase the sales in European market to keep the operation rate.

The source said alloyed aluminium price would decrease to US$ 2,200-2,300 per tonne at London Metal Exchange while the metal market keeps high in Europe and North America due to higher aluminium scrap cost. However, the source expects the high alloy market would end sooner or later.