Japan's import trades of Chinese aluminum alloy ADC12 remained thin this week due to a weaker yen against the dollar and higher primary aluminum prices, industry sources said Tuesday.
S&P Global Platts assessed its spot export price of Chinese-origin auto diecasting (ADC12) aluminum alloys at $1,680-$1,720/mt FOB China Tuesday, up from $1,655-$1,680/mt a week ago as most market indications were heard higher.
A Japanese trader said: "Chinese offers are at $1,700/mt CFR Japan, while Russian offers are at $1,690/mt CFR and there are no offers for Middle Eastern material. We have just returned from a holiday and the yen is weak. My customers are not buying."
Japan was closed Monday for Health-Sports Day.
The dollar was trading at Yen 104 Tuesday, compared with Yen 103 last week.
Another Japanese trader added that the current import offer for the Chinese alloy at $1,700/mt CFR was almost at the same level for domestically available material.
"There's no point importing now. The yen is still weak (thereby making import expensive) and my customers are not interested. In addition, LME prices are rising sharply. Let's just wait and see," this second Japanese trader added.
An east China-based producer lifted his offers by $10/mt week on week to $1,750/mt CIF, while a northeast Asian-based producer heard offers market at $1,720-$1,730/mt CIF and an east China-based analyst heard market offers averaged at $1,730/mt CIF. The price difference between CFR and CIF is negligible.
"Export offers to Japan have gone above $1,700/mt CIF as LME prices are very high. However, the Japanese market was quiet mainly due to the weak yen," added the eastern Chinese producer.
On Monday, the LME cash price for aluminum was $1,677-$1,678/mt, compared with $1,649-$1,650/mt last Monday and $1,673-$1,675/mt on Friday.
Chinese domestic ADC12 offers rose amid higher primary aluminum prices, while spot trades were generally thin after the week-long National Day holiday from October 1 to 7, industry sources said.
The Platts weekly China domestic ADC12 assessment assessed at Yuan 13,700-14,000/mt ($2,041-$2,086/mt) ex-works Tuesday, up from Yuan 13,600-13,800/mt on September 27.
An east China-based diecaster said: "Domestic ADC12 offers have jumped after the holiday. Traders are quoting Yuan 13,800/mt now, compared with Yuan 13,300/mt before the holiday."
An east China-based producer, a south China-based producer and an east China-based analyst agreed that domestic ADC12 offers had jumped to around Yuan 14,000/mt on higher primary aluminum prices.
"China has just returned from the holiday and I have no inquiries. Our offers are at Yuan 14,000/mt up Yuan 100-200/mt from before the holiday on rising logistics costs following new transport policy changes recently. I haven't heard any plan to reverse the new trucking policy on overloading," said the eastern Chinese producer.
The southern Chinese producer said: "Domestic ADC12 offers are at Yuan 14,000/mt now, up from Yuan 13,500-13,600/mt before the holiday. Spot stocks are low as there are no available trucks to transport them due to the new trucking policy."
"Yes, the new trucking policy which forbids overloading has lifted production costs. I heard market most offers at Yuan 13,700-13,900/mt and even at Yuan 14,000/mt, up Yuan 200-30/mt from before the holiday," the eastern Chinese analyst added.
The front-month October aluminum futures closed at Yuan 13,300/mt on the Shanghai Futures Exchange Tuesday, up Yuan 13,265/mt Monday and up from Yuan 12,860/mt on September 30.
