Japan’s aluminum smelters switch to Chinese feedstock on rising AK5M2 prices
2017-03-08 14:12:18   source:

Japanese secondary aluminum alloy smelters are switching to Chinese supply as Russian AK5M2 feedstock prices surged on seasonal scrap shortage, market sources said Tuesday.

Russian AK5M2 was offered at $1,840/mt CIF Japan for 0.1% magnesium material for April loading, and $1,850/mt CIF Japan for March-April loading from Saint Petersburg.

AK5M2 with 0.3% magnesium was offered at $1,820/mt CIF Japan for March-April loading.

The prices of auto diecasting alloy ADC12, the final product of AK5M2, was $15-$30/mt lower, traders said.

“Japanese smelters want to keep the price above Yen 220/kg delivered or ex-warehouse basis ($1,840/mt CIF without local handling costs) but that is hard as there is competition from imported ADC12 from China,” a Japanese trader said.

Another trader said that he had bought several hundred tons of Chinese origin ADC12 at $1,805/mt CIF Japan this week.

The first trader said he had received requests for off-spec Chinese ADC alloys from Japanese smelters.

“They are seeking to source feedstock at below $1,800/mt CIF Japan,” he said.

The second Japanese trader said smelters that needed to buy feedstock for the second quarter were turning to Chinese ADC12 to remelt or resell.

“Those who can wait, are waiting for the Russian prices to come down,” he said.

The country imports 2,000-3,000 mt/month of Russian AK5M2, according to data from the Japan Aluminum Alloy Refiners Association.

Japanese secondary aluminum alloy smelters also use domestic scrap as feedstock.

A Japanese scrap trader said they was no rise in inquiries as yet. Engine and machinery scrap traded at Yen 160/kg ($1,404/mt) delivered, for delivery in March, and 6063 extrusion scrap also around Yen 160/kg delivered, flat from two weeks ago, he added.

Japan’s ADC12 production in January was 36,092 mt, down 0.3% year on year, according to JAARA data.

Park Introduction