Japanese aluminium manufacturers and wholesalers' negotiations increase in Sept'23

The recent negotiations in the Kanto region between major secondary aluminum alloy manufacturers and raw material wholesalers in early September 2023 highlight a notable trend: a consecutive second increase in the purchase price of aluminum raw materials, reaching a high of JPY 5/kg, according to Japan Metal Daily. This upward price movement can be attributed to several key factors.

First, a strong sense of supply and demand imbalance prevails due to the scarcity of aluminum raw materials, underscoring the urgency for manufacturers to secure their procurement needs. This scarcity is exacerbated by a shortage of aluminum raw materials, amplifying the price pressure.

Furthermore, the rise in aluminum ingot prices has contributed significantly to this price surge. At the outset of September, aluminum ingots were trading at approximately JPY 380,000/t. This price uptick can be linked to the consistent performance of the international aluminum market, coupled with the depreciation of the yen and the strengthening of the dollar. In the face of these market dynamics, manufacturers found it necessary to raise their purchase prices to ensure stable and uninterrupted procurement.

Additionally, it's worth noting that disruptions in the market have been relatively rare, with August experiencing reduced production capacity due to summer vacations and extreme heat. This reduction in capacity further limited the occurrence of market events, placing increased importance on securing a stable supply chain through price adjustments.

Note: This article has been written in accordance with an article exchange agreement between JMD and SteelMint.