The market of aluminum raw materials A drain & tight on the open market

                                          IRUNIV 2013/11/20

 If we conclude it in a word, the domestic market of aluminum raw materials is tight. It was temporarily soft from the end of June through the beginning of July, but today on 17th also it stood at the turning point as of July and a tightness is told to be in various regions.
 The alloy demand in Japan is a little steady, but the tightness of scrap of goods of lower grades type (low grade) is stronger than that. If careless, the time to go for export immediately. The domestic scrap buyer cannot relax.
almi The person in charge of aluminum alloy maker who purchases 700-800 tons a month of aluminum scrap in Chubu District says, "Scrap is as tight as ever. Especially casting turning, engine roller, base metal and so on are moving very slowly. The turning is nationally in short supply, isn't it?" It is said that the company lowered the buying price of scrap in early July, but they decided to level off in the latter half. Major sash makers have lowered the buying price of scrap by 10 yen in the first half, but the value returned a little in the latter half.
Here below the unit price revised up a little from the price in the first half.

 The buying price of secondary aluminum alloy maker's scrap (Kanto District)
 ( yen / maker's bottom price based per kg)
  2S new cutting ....170-175
  printing plate....173-178
  63 grade sash....165-170
  52 grade alloy....158-163
  screw included sash....142-147
  aluminum bronze radiator....295-300
  base metal ....195-200
  engine casting ....155-160
  new machinery casting.... 160-165

  machinery casting.... 143-148
  aluminum foil....170-173
  UBC....123 - 128
  turning.... 120 - 128
  casting turning....135-140


almi The trading company source of aluminum alloy handling says, "The domestic car production earns on KD set for export. The parts production in Japan is sharp by making use of the merit of a weak yen. It is thought that accuracy of this DEMAND raises the demand of aluminum scrap for aluminum alloy and raw materials. The price of ADC12 in Japan is changing firmly at JPY225 - 230/kg.
Whether this by design, the overseas ingot suppliers are uniformly "bullish".Above all, the Russian lump (AK5M2) goes up a little to USD2000 - 2040/t comparing with a month ago. It has already been 250 dollars higher than aluminum new lump price (USD1752.5/t) of LME.

l Changes in market prices of LME aluminum and Russian AK5M2

 About the aluminum alloy market, how is the spots supply and demand in Asia than LME meanwhile? Above all, the supply and demand trends in Japan have a decisive influence on Asian market. Apart from Russian lump, ADC12 of China's Yiechu Metal Recycling rises within narrow limits to USD2140 - 2160/t comparing with a month ago. It is bullish.
almi Given that Russian lump is 2,010 dollars , the C.I.F. price calculated by the exchange rate at 100 yen is JPY211/kg. Therefore, the domestic base metal suppliers are bullish, too.
The Russian lump has been drawn until now in the buying of the hot aluminum (molten metal maker) such as Toyoda Tsusho, Honda Trading and Daiki Aluminium. But, there is a thing that the players' buying peace here increased , and Russian side becomes bullish.
The tightness of turning becomes strong due to the fallen of the production of low current makers in Kansai. Actually, even in alloy lathe there are quite a few makers which buy at JPY130 - 133/kg. There is specially a high price for casting lathe (turning).
UBC It was considered that UBC fell down, but the outbreak is still small this July. It really comes out before or at the end of the Bon Festival. Thus, it is said, "Yet it is the environment where is still hard to make a drastic fall (alloy maker)". Actually, also Korean products, NOVELIS there is a JPY133/kg at port place (* in Nagoya district), the market sense of UBC differs in the area.
Kyushu commented recently that UBC have kept the high price because Korea is near.

 But also apart from Korean products, it is said, “A high price on Shinryo products comes out to the designated company of Kyushu. As the price from Kyushu is higher than Kansai”. There seems an aspect that the high price of Shinryo pulled the UBC market in Kyushu District.
As stated above, the raw materials of aluminum scrap which new lump substituting does not work are in drain. As on the open market quotations, there is also an item which its value is returning a little in the slack summer season. In fact, there is a sign from the South Korean dealers grieving, "Japanese market is so expensive that we are powerless".
 In order to make up the lack of aluminum scrap in Japan, the alloy makers and others have been treating to import lumps positively. Also to import scrap itself, it is HIGH PRICE at all Europe and America . It is said that major aluminum alloy makers ( Din226 annual production of 300,000 tons ) went bankrupt due to the lack in scrap and the remarkable rising prices even in Europe. The inquiry of Din is strong and the tightness of scrap is still strong as it is.
 We expected that the aluminum raw materials in midsummer was weak. But at least until before the Bon Festival, we want to revise the market observation that BULL (strong basic conditions) continues.
(IRUNIV SUU)

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