Japan Secondary AL Alloy Makers to Restart Silicon Metal 553 Purchase

Japanese major secondary alloyed aluminium makers including Daiki Aluminium and Summit Showa Aluminum decided to restart silicon metal 553 for the first time in 6 months. They purchase the metal for July consumption after the inventory adjustment. Summit Showa Aluminum will purchase the metal at spot basis while Daiki Aluminium mulls the best procurement.

Alloyed aluminium contains 7-8% of silicon metal. The alloy makers tried to reduce the overstock of silicon metal due to sharp drop of the alloy demand. They were away of silicon metal market for January-March and April-June.

Chinese silicon metal export decreased to 13,843 tonnes in January-April, which was 80% lower than same period of 2008, according to Chinese statistics. Chinese offer price is C&F US$ 1,600 per tonne to Japanese buyers for silicon metal 553, which is around US$ 100 lower than 3 months ago.

Some Japanese trading firms have high priced silicon metal 553 due to very slow demand. Japanese alloy makers could purchase silicon metal from such trading firm, instead of Chinese suppliers.

Chinese silicon metal production is still low level, according to Japanese trading firm source. The production level is estimated to be 20-30% lower than the peak when many refineries stop the operation in major producing areas of Guizhou and Yunnan, China.