Al Melt Suppliers in Half Operation and Low Profitability

Demand for aluminium melt has maintained stagnant in Japan and overseas along downturn of global automotive market. Operating rate is less than halving from the peak even at major melt suppliers. Melt suppliers are suffered from worse profitability.

Daiki Aluminium Industry has suspended aluminium melt supply from Shirakawa plant in Fukushima, Japan since the beginning of this year. The firm examined to restart the operation in late March but, actually, postponed the recommencement since the demand stayed stagnant. The supply is likely to restart in or after June.

Aluminium melt supply of Nikkei MC Aluminum’s Tokura plant is 60% compared with the peak. Major melt suppliers in West Japan are also in low operations at around 40-50% along output reduction by automakers.

Overseas melt demand is also stagnant except for China. Japanese dealer source said the operation rate at Most in Missouri, USA, a joint venture between Daiki and Toyota Tsusho to supply aluminium melt, seems more than half compared with the peak since North American auto market is seriously damaged.

Some sources point out aluminium melt suppliers post loss when their operation rate becomes below 70%. The reason is that melt suppliers must keep a certain volume of product in melting and holding furnaces to prepare for sudden orders even when the demand is much decreasing.