Secondary Al Alloy Makers to Cut Low Grade Scrap Price by 5 Yen/kg

Secondary aluminium alloy makers around Tokyo aim to cut the purchasing price for low grade aluminium scrap by 5 yen per kilogram for 1-15 July compared with the previous half month. The makers are in price negotiations for 1-15 July with local scrap dealers. As to high grade scrap, the makers would set the purchasing price unchanged from 16-30 June. The alloy makers hope to improve the business profitability by material cost cut. Scrap dealers are resisting the price cut when primary aluminium price keeps the high level since mid June. The price negotiations would conclude within this week.Secondary aluminium alloy makers are suffered from worse profitability since they have failed to put the surging costs for energy and substantial materials on the alloy price. An alloy maker source said the alloy selling price was cut by 2-3 yen per kg or set unchanged for June shipment by the consumers such as die casting makers. The background is weak auto market in North America.The 3-month future price of primary aluminium at London Metal Exchange was US$ 3,148 per tonne at the purchasing price in afternoon trading on 1 July. To follow the high LME price, Japanese domestic price of primary aluminium is surging to over 345 yen per kg.Scrap dealers are basically disapproving the price cut when primary aluminium price stays high. On the other hand, some dealer sources said they should approve the price down by 2-3 yen per kg for low grade scrap due to much worse profitability at the alloy makers.