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CHINA ALUMINUM: Domestic ADC12 spot offers remain rangebound

Jul 5th 2015 at 10:06 AM


China's domestic spot aluminum alloy offers generally remained rangebound, while demand stayed fairly steady with no sign of a significant swing in either direction, industry sources said Tuesday.


Leading Chinese producer Sigma Metals maintained its offer steady at Yuan 17,100/mt ex-works ($2,751/mt) Tuesday, unchanged from the previous week, while most non-Sigma offers were at Yuan 15,600-16,300/mt, similar to those heard last week.


Platts kept its weekly China domestic ADC12 assessment steady at Yuan 15,600-16,100/mt ex-works Tuesday, unchanged from the previous week.


"Chinese domestic demand has generally remained steady amid steady orders. We didn't see any major increase or decrease in demand," said an east China-based producer.


An east China-based diecaster said: "We didn't buy this week as we still have stocks from our purchase last week. Anyway, we have no new orders from our customers. We are still servicing existing orders."


This diecaster bought at around Yuan 15,900/mt last week.


Another east China-based diecaster has bought last Friday at Yuan 15,800/mt after weeks of not having purchased ADC12.


"Our offers have been steady around Yuan 16,000/mt," said an east China-based trader.


China's spot aluminum ingot price was heard around Yuan 14,550/mt Tuesday, up from Yuan 14,500/mt last Tuesday.


On Tuesday, the April aluminum futures contract was at Yuan 14,615/mt on the Shanghai Futures Exchange, compared with Yuan 14,540/mt last Tuesday.


The LME official cash price for aluminum stood at $1,898-1,898.50/mt Monday, unchanged from last Friday but down from $1,895-1,895.50/mt last Monday.


Meanwhile, ADC12 import trades into Japan soared from late last week due to the weaker US dollar trading at Yen 94-95 from 95-96 earlier in the week, Japanese market sources said. Traders reported closing deals for 2,000 mt in total, mostly at $2,180/mt CFR Japan for May loading. Deals were also reported for 100-200 mt of Middle East origin metal at $2,170/mt CFR Japan for late April loading.


Platts widened the Chinese ADC12 export assessment to $2,160-2,180/mt FOB China Tuesday, from $2,170-2,180/mt last Tuesday.


"Some Japanese end-users forecast the dollar to hit Yen 100, so when the dollar weakens to Yen 95, buying starts," said one Japanese trader.


He added some end-users were seeking July deliveries in advance, while most were buying for June.


The buying spree in the past week was driven by the exchange rate and the alloy demand for April-June stays flat from January-March, trade and diecaster sources said.


A source at a diecaster making engine components said April-June production plan stays flat from January-March as slow domestic car sales will offset the boost in the Japanese car sales overseas.


"I have sold a few hundred tonnes to Japan at $2,180-2,200/mt [on CFR basis] this week but I don't see significant pickup in buying interest.


Generally, the Japanese buyers are buying more from Middle Eastern sellers on lower offers at $2,170/mt [on CFR Japan basis]," said an east China-based producer.


Another east China-based producer: "I did not get any inquiries from Japan this week. Anyway, I am keeping offers steady at $2,180/mt as imported aluminum scrap price has stayed high."


This eastern Chinese producer heard imported zorba grade of scrap around $1,800/mt CIF China.



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