The background of price rise in aluminum UBC in Kyushu region
2015/05/09Although there was about 10 yen/kg difference in the prices of aluminum UBC between western and eastern Japan, the difference has gradually narrowed to 5 yen/kg or almost 0 yen as the price dropped in the eastern Japan. The price is around 165 yen/kg at the moment. The supply and demand balance eased in Kanto region as RSI manufacturers have decreased their purchase volume and recyclers specialized in UBC recycling have also restrained receiving the material. Accordingly, the price has kept dropping, but the things are different in Kyushu region, which is located in western Japan.
A UBC processor which recycles mainly UBC in Fukuoka says that the price wonft drop in Kyushu region, especially in Fukuoka and Kumamoto as they are close to Korea. The prices are still at high level around 170 to 175 yen/kg and the bidding prices are also higher.
Recent contract prices of aluminum UBC in Kyushu region are as follows.
@@Kagoshima city, Kagoshima prefecture: 178.50 yen/kg
@@Iwakuni city, Yamaguchi prefecture: 180 yen/kg
@@Hiakari, Kitakyushu city, Fukuoka prefecture: 176 yen/kg
@@Chikushino city, Fukuoka prefecture: 175.80 yen/kg
gThe traders in Kyushu region tend to firmly believe that the prices (both ferrous and non-ferrous) will rise simply in the future. Some of them hold 2,000 tons of pressed steel cans. Not a few traders still hold aluminum cans valued at 175 yen/kg for a long time in expectation of price increase. Considering the UBC price will rise to 180 yen/kg, they hold stocks consistently. Even if I explained them logically that it shouldnft, they refuse to hear,h complained the above-cited UBC processor.
Subsidies for trading boost exports
The price of containerized aluminum pressed UBC for Novelis is said to be around 180 yen/kg in Fukuoka which is close to Korea. Therefore, the purchasing prices have continued to be more than 170 yen/kg. In addition, local authorities in Kyushu region have implemented policies to make a subsidy payment of 20,000 yen per a container (in case of the Sendai port in Kagoshima prefecture) in order to stimulate trade, which also attributes to more exports from Kyushu region to Korea.
Japanese government expresses concerns over excess exports of aluminum cans and lead batterie@scrap as well as compact appliance scraps, but local governments seem to have different view on exports from that of the government. There is a harsh reality that local authorities have no alternative to stop their declining revenue.
However, we must say that itfs quite difficult to see further increase in UBC prices expected by scrap dealers in Kyushu region. Rather, it is expected to continue to drop to the 130 yen level.
Korean Novelis purchases UBC not only from Japan but also widely from the entire south-eastern Asian region. As Novelis Korea is a factory mainly for UBC, their UBC costs are supposed to become severe. Also, it seems that the changes in supply and demand balance of can materials will bring pressure on the UBC market.