Extremely weak Japanese Aluminum UBC market, price expected to continue to drop during summer

2015/06/01

The price of aluminum UBC (used beverage cans), good metal for recycling, which has kept dropping already, is very likely to fall further sharply from June. IRUNIVERSE forecasted that the bottom price of aluminum UBC would be at 110-120JPY/kg this year, but it may become reality earlier than expected.


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Aluminum UBC supply and demand has eased off currently in late May. Possible factors are as follows.
@1. Weak demand for aluminum UBC (RSI, Deoxidizing agent)
@2. Limited export for Korea as well as difficulty in reaching agreement on the price
@3. Sharp increase in UBC supply caused by anticipation of a fall
@4. Limited or stopped receiving materials by aluminum alloy manufacturers and deoxidizing agent manufacturers due to increased supply
@5. Continued limitation of receiving materials by UBC/RSI manufacturers

The current market has been the total opposite to that of the same time last year when a source from an aluminum alloy manufacturer says, gWe had experienced great difficulty in a sellerfs market.h Now, the market is shifting to a complete buyerfs one with an excess supply.

photoAs the demand for RSI from UACJ is weak, purchases for UBC from the related suppliers are weak. Especially, Shirakawa plant of D Company, one of the largest aluminum alloy manufacturer, is more likely to stop receiving UBC from June.

Also, being fully stocked, some manufactures producing deoxidizing agent from UBC for steel manufacturers already advised dealers and traders of UBC scrap that they would not purchase materials in June.

SR Company, a major consumer of UBC, has also limited receiving material since February. The limitation of receiving materials has continued over a longer period than ever. The UBC dealers for the company also restrained from purchasing UBC if they donft have an urgent need.

In addition, purchasing price of Korean Novelis, an anchor to Japanese scrap dealers, hasnft been so attractive. The shipment for June has already closed. As to the shipment for July, their purchases from Japan will be around 3,000t in total. However, Japanese suppliers and Korean Novelis said to have found difficulties in reaching an agreement on the price. The Japanese suppliers want the CIF price to be 1,450JPY/kg and over, but Novelis hasnft accepted it yet.

Judging from abovementioned situation, current 160JPY/kg of aluminum UBC price is expected to surely drop to a 150JPY/kg level in June. If supply from the market increases more than expected (for example, clearance of UBC inventory due to anticipation of a fall), it may drop further to a 140JPY/kg level. If the future demand is still weak even in summer when UBC generates in bulk, it will drop further to 120JPY/kg at the end of August.

iIRuniverse Sasakij

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