Japan Primary Aluminium Price Indicator to Up by 10 Yen/kg for Jan-Mar

Japanese primary aluminium ingot price, the quarterly indicator for rolled aluminium products’ prices, will increase by 10 yen per kilogram for January-March 2011 from the previous quarter to reflect upsurge of overseas primary aluminium market price since July. The indicator decreased in October-December, for the first time in 3 quarters, while upturns for January-March. The indicator’s upsurge may impact rolled aluminium product makers and sellers when demand condition is concerned to weaken for January-March.

In Japan, rolled aluminium products’ prices are decided quarterly along the average primary aluminium price during the previous 3 months. Rolled aluminium products’ prices for January-March 2011 are based on the average ingot price for September-November 2010. The indicator upped by 30 yen per kg for April-June, by 10 yen for July-September while downed by 30 yen for October-December.

Primary aluminium 3-month future price at London Metal Exchange was averagely US$ 2,193 per tonne in September, US$ 2,378 in October and US$ 2,359 in November. The sharp upsurge was reflected on Japanese indicator for January-March. LME aluminium price is expected to maintain strong tone for a while, when commodity market totally shows uptrend.

In Japan, demand for rolled aluminium products largely improved in the first half of fiscal 2010 (April-September 2010) and returned to 80-90% level of the recent peak in the first half of 2008. In the second half of fiscal 2010, the demand is slowing down from automobile and capacitor makers. The demand condition is unforeseeable with potential decline since Japanese government’s economic stimulus programs are ceased or shrunk for cars and home appliances.