Unpopular Japan Aluminium Scrap in Tight International Market

Offshore demand for Japanese aluminium scrap is still slow despite of worldwide short supply. Chinese major secondary alloyed aluminium makers try to secure the raw materials from North America, Central and South America, Russia, Europe, Middle and Near East and Africa while they have little interests in Japanese scrap due to the exclusivity and quality problem.

Japanese aluminium scrap export increased for China in March and April 2009 when the scrap market price was less than international due to major production cut by Japanese secondary alloy makers. However, some of the order was canceled due to quality problem.

A Japanese trader source said Japanese mixed casting scrap grade is much lower than tense scrap from North America. The estimated aluminium content is around 80-85% for Japanese mixed casting scrap compared with around 90% of tense scrap from North America.

North American tense offer is usually around 30yen per kilogram higher than Japanese mixed casting scrap. However, a Japanese dealer said with the content difference, Japanese mixed casting scrap price is higher than North American tense scrap. The dealer said Japanese aluminium scrap has no cost competitiveness despite of the lower quality.

Chinese buyers complained about Japanese aluminium sash scrap. Chinese buyers prefer to scrap package with baler machine due to each treatment by hand while Japanese pressed scrap is hard to treat by hand. Baler machine is still no popular in Japanese scrap dealers while most of dealers have the machine in North America.

Japanese dealers’ exclusivity also contributed to the lower export. Japanese dealers prefer to deal with domestic buyers even with higher offer from Chinese buyers. However, Japanese dealers change the mind gradually when offshore demand grows and many dealers try to get export license.