Japan Domestic Secondary Al Demand May Level Off in 2H09

Japanese major secondary aluminium alloy makers, including Daiki Aluminium Industry and Summit Showa Aluminum, seem to increase their output volume by around 10% for July-September compared with the previous quarter. Their operation rate could recover to average 60%. However, domestic demand for secondary aluminium alloy is expected to level off in the last half of 2009.

Domestic demand for secondary aluminium alloy would slightly improve for July-September from April-June, when the users have almost completed inventory adjustment. Secondary aluminium alloy makers expect their sales volume in July might keep flat or increase by around 5% from June.

Market players forecast the domestic demand levels off in the last half of 2009. One background is that major automakers announce to raise their local procurement rate for parts and materials at offshore plants in China and North America. Japanese export of completed cars and automotive parts will shrink and domestic demand for secondary aluminium alloy will decrease.

Additionally, Japanese automotive parts export for North America maintains stagnant due to the productive suspension by General Motors and Chrysler Corporation. Japanese auto parts export seems to be almost stopping for Big Three automakers, though which had kept high level as well as knockdown export, and Japanese die-casting makers are suffered from output recovery delay, said Japanese source.