Secondary Al Makers Raise Domestic Scrap Utilization,Tokyo

Aluminium scrap supply is likely to tighten more around Tokyo in February. Secondary aluminium alloy makers, the main consumer of aluminium scrap, are recently increasing utilization rate of domestically generated scrap. Local alloy makers have concluded few contracts for Russia’s secondary aluminium ingot, AK5M2, arriving at Japanese quays during January-February. The alloy makers’ procurement is significantly decreasing for US aluminium scrap, too.

Domestic generation of aluminium scrap stays at 60% level compared with the peak in 2007. Japanese secondary aluminium alloy makers are facing difficulty to secure enough materials. Aluminium scrap market price is expected to continue rising in February to reflect the supply tightness.

Offer price of Russia’s AK5M2 against Japanese customers is currently CIF $ 2,080-2,100 per tonne, surging by more than $ 100 from the beginning of this year.

As to US aluminium scrap, the market price is rising more rapidly than Japanese market price. Japanese users are failing to procure US scrap when Chinese and South Korean players are aggressively purchasing US scrap to meet strong demand for secondary aluminium alloy in their countries. US aluminium scrap export to Japan is estimated to decrease widely due to few contracts at present.