Daiki’s Shirakawa Plant Recovers Al Scrap Procurement in July

Daiki Aluminium Industry’s Shirakawa plant in Fukushima, Japan will increase aluminium scrap procurement largely in July, mainly for common grade scrap such as sash scrap. The plant needs to secure enough volume of aluminium scrap when the operation rate of secondary aluminium alloy production lines is expected to reach 50-60% in July from 10% until June.

At Shirakawa plant, production of RSI (re-melted can scrap ingot) keeps steady while actual demand for secondary aluminium alloy dropped down in and after autumn 2008. Shirakawa plant’s secondary aluminium alloy output stayed at around 10% compared with the peak for January-June 2009. The plant kept aluminium scrap procurement as low as immediate consumption.

The plant’s operation is currently recovering when secondary aluminium alloy consumers, mainly auto parts makers, have advanced inventory adjustment of their materials and products.

Shirakawa plant collects aluminium scrap mainly generated in Tohoku region of Japan. Scrap generation from plants and demolitions is widely decreasing in the region under slow economy. Scrap supply seems tightening. Shirakawa plant resumes regular scrap procurement by having price negotiation with scrap dealers every half month to secure enough volume scrap stably.

Meanwhile, Shirakawa plant has suspended aluminium melt production since the beginning of this year. The plant plans to continue the suspension because the plant needs monthly orders at least 500-600 tonnes against the output capacity of 800 tonnes per month to reach the breakeven point.