Japan Secondary Al Alloy Makers Get 2-3 yen/kg Hike

Japanese major secondary alloyed aluminium makers including Daiki Aluminium Industry, Nikkei MC Aluminium and Summit Showa Aluminium apparently concluded the after shipment price negotiation with the buyers around Tokyo to increase the selling price by 2-3 yen per kilogram for January shipment. The price increased to 218-223 yen for AD12.1 grade for general users at 120 days note transaction including freight. The alloy makers would seek additional price hike in February shipment when their profitability is still sever.

The alloy makers offered 10 yen per kg of hike for January shipment to cover higher cost for raw materials including copper and metallic silicon. They also tried to cover past cost increase when they couldn’t cover all of the cost increase. The buyers of die-casting makers resisted the wide hike. The price hike was only 2-3 yen with variation depending on the transactions, according to the alloy makers.

The alloy makers suffer from higher raw materials cost and lower selling price. Daiki Aluminium revised the profit outlook downward for the year ending March 2011. Other makers also cannot secure sustainable level of margin at the current selling price. They try to increase the selling price level at least by 10 yen per kg for February shipment when the raw materials cost should increase more in February.

Offshore alloy market keeps increasing. Chinese offer is year high of US$ 2,480-2,490 per tonne. The price represents 215-205 yen per kg including freight, which is near primary aluminium ingot price to large lot buyers. Japanese alloy buyers would shift to domestic alloy due to the higher import price.