Japan's aluminum auto scrap dealers eye exports as local demand slows
Tokyo (Platts)--18Dec2012/518 am EST/1018 GMT
Japanese aluminum auto shred scrap suppliers are eyeing exports as local
demand has slowed on the back of falling car production since October, market
sources said Tuesday.
Spot inquiries for scrap aluminum exported from Japan to Asian countries
rise at this time of the year as scrap yards close in regions experiencing
snowfall, tightening global supplies.
In addition to seasonal beverage cans and window frames scrap that
comprise over half of Japanese scrap aluminum exports, scrap dealers have
started to export engine and auto shred scrap, as Japanese automakers cutting
output since October have hit demand.
"Engine and auto shreds were not exported because they were going
straight to local secondary aluminum alloy smelters working closely with the
automakers," said one local scrap dealer. "But alloy demand has fallen
particularly in the Kanto region due to the recent slump in car production,"
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"Demand [for scrap] stays good in central Japan [around Nagoya City],
but the cost of trucking scrap to central Japan from the Kanto region is
equivalent to shipping it for export," the dealer added.
Auto shred scrap, also known as twitch, is traded at Yen 140 ($1.66)/kg
ex-yard in Japan, two dealers said. The export price comes to Yen 155/kg
including management and documentation fees, or $1,845/mt FOB. Scrap of
similar grade is trading near $1,900/mt in the overseas markets, said a
"There were several 50-100 mt deals done [at above $1,850/mt FOB]
recently, to South Korea, Thailand and China," the dealer said.
Japanese scrap prices are revised twice a month reflecting changes in
the London Metal Exchange high-grade aluminum price moves and demand,
according to industry sources.
Auto shred scrap prices, however, stayed more or less flat at Yen 140/kg
ex-plant in the second half of December from earlier in the month, and engine
scrap also remained at Yen 130-140/kg ex-plant, due to poor demand, dealers
Japan exported 111,243 mt of scrap aluminum over January-October 2012,
up from 90,981 mt in the same months last year, according to Japanese customs
JAPAN SCRAPPING MORE CARS
Japan's supply of automotive scrap is on the rise as the number of
dismantled cars increased this year, on the back of more scrapped cars from
earthquake-hit northeast Japan and the government subsidies boosting
passenger car sales, according to Japan Automobile Recycling Promotion Center
The government subsidy program to promote fuel-efficient vehicles ended
Japan has scrapped 3.1 million passenger and commercial vehicles in
total from January to November, up 19.9% from a year ago, according to JARC.
One vehicle typically generates over 250 kg of aluminum scrap, said traders.
JARC forecasts 1.2 million more vehicles to be scrapped over December to
March 2013, up roughly 10% from 1.1 million vehicles a year ago.
"There were many cars destroyed immediately after the March 11
earthquake last year, but they did not get dismantled as there were other
reconstruction priorities in the northeast region," said JARC data general
manager Muneo Fujita. "Also used cars that were going to scrap yards were
transported to disaster-hit areas in need. Now the area is slowly
reconstructing. The government subsidy program also helped to speed up
replacing old cars with new," he added.
It takes roughly 30 days for cars to dismantle into various recycled
resources, Fujita added.
--Mayumi Watanabe, firstname.lastname@example.org
--Edited by Geetha Narayanasamy, email@example.com