Market Update: ADC12 aluminum alloy and aluminum scrap


Regarding the third-quarter prices of ADC12 for auto manufacturers, alloy manufacturers seem to have offered lower prices to some auto manufacturers to increase their volumes of order placed to recover the decreased reduction in the second quarter.

According to a mid-sized secondary aluminum alloy manufacturer with the monthly production of around 4,000t saying that gwe are planning to offer 248-250JPY/kg considered to be lower prices to some auto manufacturers, but to offer higher prices to othersh, the third-quarter prices of ADC12 may finally remain almost the same level as the previous quarter.

Competition among domestic manufacturers putting downward pressure on prices
Regarding the third quarter, the company says, gDomestic ADC12 absolutely has more advantages by a drop in the Japanese yen at the moment. In fact, auto manufacturers have increased their purchases of domestic materials. Our production is expected to increase almost 1.5 times in the third quarter.

The price of Chinese A class ADC12 made by Ye Chiu and Delta is $2,020/t CIF Japan at the moment. In converting it at 124 yen to a dollar, CIF price will be 263JPY/kg (charges included). Then, the price range of 250-255JPY/kg for domestic ADC12 would be acceptable. Or, it would be better to conclude at 255JPY striving for 260JPY. A major alloy manufacturer with the production of 15,000t/m said, gAs domestic manufacturers are competing to increase their volumes of order, a slight downward pressure has been put on the prices.

In short, price competitions among domestic alloy manufacturers are said to have arisen instead of the competitions against imported ADC12 which had previously seen.

gWe are expecting auto manufacturersf production to recover in the third quarter, but in fact, production will not increase so much in auto manufacturers other than T Company, the biggest auto manufacturer. The production of an auto manufacturer in Hamamatsu City, Shizuoka will increase compared to the previous quarter, but will be almost the same level as the year-earlier period...h There seems to be a little concern that the production of automobiles and its components, key to secondary aluminum alloy industry may not increase as expected.

Use of high grade scraps for alloy manufacturing
In addition, the flow of aluminum scrap materials considered to be the biggest lifeline for the aluminum alloy industry in a way continuously hasnft been smooth at the moment. The prices of high grade scraps such as 2S, printing plate, A sash, 52 grades, and wheel are declining steadily and their flows are smoother, but the supply of scrap materials for alloy manufacturing seems to remain insufficient.

A purchasing staff from an alloy manufacturer said confidently, gIn the first half of June, we will lower our purchasing prices by 5JPY/kg for high grade scraps and by3-5JPY/kg for low grade scraps. Then, we will lower them further in late June.h and added that the company was also considering the use of high grade scraps customizing them to best meet the needs for alloy manufacturing.

UBC still has a surplus
UBC is the item which seems to be most in surplus among aluminum scraps. Demand for UBC has decreased in general in Japan as aluminum alloy manufacturers and deoxidizing agent manufacturers has continuously limited or stopped receiving materials. It leaves no doubt that the UBC price will drop to the 150JPY/kg level.

As to UBC export, Korean Novelis is already finishing its purchase for delivery in July. The prices are ranging from $1,350 /t to $1,400/t CIF Korea, but it is reported that a major trading firm contracted at around $1,400/t.

As the UBC prices are around $1,250/t in South Africa and Europe, Novelis seems to plan to purchase the materials from those areas.

iIRuniverse Sasakij

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