Chinese spot aluminum alloy ADC12 prices remained steady as domestic primary aluminum prices stayed strong despite a fall in London Metal Exchange aluminum prices, industry sources said Tuesday.
Sources said there had been no significant change in demand, thereby putting ADC12 offers under pressure.
S&P Global Platts maintained its weekly China domestic ADC12 price assessment at Yuan 13,400-13,700/mt ($2,053-$2,098/mt) Tuesday, unchanged week on week with most indications heard within the range.
"Most end-users bought when prices rose previously; now, they are adopting a 'wait-and-see' approach," an east China-based producer said. "Our offer is at Yuan 13,600/mt, down slightly from last week, while market indications are mostly steady around Yuan 13,500-13,600/mt."
An east China-based producer, offering at Yuan 13,500/mt, said: "At least the domestic trade is performing better than exports."
An east China-based diecaster, however, said business "has not been good. We have had no orders for four weeks. It's very worrying."
Th diecaster last bought at over Yuan 13,000/mt and reckoned offers should be steady.
An east China-based analyst said: "LME aluminum prices fell but SHFE aluminum futures remained strong, giving some support to ADC12. At the same time, domestic aluminum scrap prices for tense and taint tabor grades also remained steady at Yuan 9,700-10,600/mt on tight supply. I'm hearing ADC12 offers at Yuan 13,700/mt, up from Yuan 13,600/mt last week."
The front-month June aluminum futures closed at Yuan 12,495/mt on the Shanghai Futures Exchange Tuesday, from Yuan 11,945/mt last Tuesday.
The weekly aluminum stocks level stood at 293,187 mt in SHFE warehouses Friday, down 2.7% week on week.
In Japan, spot import trades turned lackluster due to the stronger dollar this week, pushing the dollar to trade at Yen 109-110, from Yen 105 earlier in the month.
Despite the Chinese export offers decreasing by $10-$20/mt over the past week on the back of the weaker LME and the SHFE, Japanese buyers were mostly unmoved, as the stronger dollar set off the decrease in Chinese offers.
S&P Global Platts lowered the ADC12 export price assessment to $1,720-$1,730/mt FOB China Tuesday, down from $1,720-$1,740/mt last week.
Most competitive offers were at $1,740-$1,750/mt CIF Japan for June-July loading from south China. One Japanese trader and one consumer said the most competitive offers were rejected as local supplies were $40-$50/mt cheaper.
There were offers as low as Yen 190-192/kg ex-warehouse/delivered, which would be around $1,700/mt, a Japanese trader and a consumer source said.
"It looks like these cheap supplies are going to be available for the next two months or so," a Japanese trader said. "They are excess supplies as a result of Mitsubishi Motors output cuts."
Mitsubishi Motor's Mizushima plant has suspended production of light passenger vehicles following misreporting of fuel emissions data in April. The cuts accounted for one third of the automaker's total production.
It was buying ADC alloy supplies mostly locally.
The Kumamoto earthquake continues to affect automakers as some components manufactured in the quake-hit areas are still short of supplies.
"There is no major downward revision in the car production plans but there are more possibilities of output slowing down than rising, so people are not buying raw material," a Japanese diecaster said.
A northeastern Asian producer said: "Despite high aluminum scrap prices on tight supply, ADC12 offers didn't rise. In fact, I'm hearing a fall in export offers to $1,780-$1,790/mt due to the weak primary aluminum price."
A north China-based trader said he had not traded for a month, while an east China-based producer said export trades had been thin and another eastern China-based producer said market fundamentals remained weak.
"My export offer is at $1,720/mt which is very low and there's no done deal," the northwestern Chinese trader said. "Yesterday my offer was $1,740/mt. Japan's demand is missing and there's no trade."
The eastern Chinese producer said: "I heard LME aluminum prices have slipped and Japanese are not buying. Aluminum scrap supply has remained tight. My offer is steady at $1,750/mt while market indications are at $1,720-$1,740/mt."
An east China-based analyst said he had heard imported Zorba scrap at $1,430/mt CIF China.
On Monday, the LME official cash price for aluminum was $1,525-$1,525.50/mt, from $1,556-$1,556.50/mt last Monday.
