Primary Al Price Surges, Al Scrap Price Keeps Flat in Osaka

Market price of primary aluminium ingot is surging to 170 yen per kilogram at dealers’ sites without freight around Osaka, when primary aluminium price at London Metal Exchange (LME), the indicator, is rising to the highest since December 2008. Japanese dealer source indicated domestic market price could revise yearly record 174 yen marked on 12 June under supply tightness.

Domestic market price was around 170 yen per kg in Osaka on Tuesday, up by 3 yen from last week. Domestic demand for primary aluminium is recovering from automobiles and re-rollers. Ingot inventory at Japanese quays represented the decrease for 4 straight months and approached 200,000 tonnes. Additionally, UC Rusal, the world largest aluminium producer, is stopping ingot supply to Japan for July-September. Ingot supply is tightening.

To reflect upsurge of primary aluminium ingot price, secondary aluminium alloy makers around Osaka are likely to set their aluminium scrap purchasing price unchanged for 16-31 July except for used beverage can (UBC). The makers’ scrap procurement price was expected to lower by about 5 yen per kg for 16-31 July, when LME primary aluminium settlement temporarily declined to US$ 1,534 per tonne.

Secondary aluminium alloy makers’ purchasing price is estimated to become 135-140 yen per kg for printing board scrap, 130-135 yen per kg for high grade sash scrap and 115-120 yen per kg for low grade sash scrap for 16-31 July. Meanwhile, UBC purchasing price is expected to lower by 2-5 yen to 90-95 yen per kg since domestic can recyclers decreased their UBC procurement price and UBC generation increases in summer.