Lower Automobile Output Cuts China Al Alloy Production

Guangdong Longda Aluminium and Baoding Longda Aluminium Industry, which are Chinese secondary alloyed aluminium makers with share by Tokyo based deoxidizing agent maker, Nippon Kinzoku, decrease the production volume recently due to lower operation rate by local transplants of Japanese automakers under limited supply of Japanese automotive parts. Nippon Kinzoku expects the production could decrease more in May.

Guangdong Longda Aluminium and Baoding Longda Aluminium Industry get cancel notice and delivery delay request from many users after the major earthquake in Japan. Local transplants of Japanese automakers including Toyota Motor and Nissan Motor reduce the alloy purchase under the production cut. Guangdong Longda Aluminium and Baoding Longda Aluminium Industry, which kept full capacity operations before the quake, reduce the operation rate.

Chinese transplants of Japanese automakers keep the operation only with stocked parts when some of the parts supply stopped especially for electronic parts and engine parts. Depending on the critical parts supply, the aluminium alloy demand could decrease more.

Nippon Kinzoku keeps construction activity of the third Chinese plant in Yantai. The plant will start commercial operation in December as planned. However, Nippon Kinzoku froze all new projects in China despite of request from major automakers.

Guangdong Longda Aluminium and Baoding Longda Aluminium Industry reported record 45,000 tonnes and record 52,000 tonnes of sales in 2010, which was 80% and 48% higher than 2009 figures. Guangdong Longda Aluminium and Baoding Longda Aluminium Industry plan 50,000 tonnes and 62,000 tonnes of sales in 2011.