Offers for Chinese domestic spot aluminum alloy ADC12 rebounded Tuesday, mainly on higher primary aluminum ingot prices despite no significant change in physical buying interest during the current summer lull, industry sources said.
Platts lifted its weekly China domestic ADC12 price assessment to Yuan 15,100-15,600/mt ($2,453-2,534/mt) ex-works Tuesday, from Yuan 15,000-15,500/mt last week.
"Despite the weak demand in summer, our offers have gone up to Yuan 15,600/mt, up about Yuan 100/mt from last week. This is mainly due to higher domestic primary ingot prices affected by stronger LME prices," an east China-based producer said.
Two Chinese diecasters also heard higher domestic offers.
"This week, offers are more expensive. We bought at Yuan 15,400/mt from a trader, up from around Yuan 15,000/mt last week," an east China-based diecaster said.
Another east China-based diecaster said: "We have bought at Yuan 15,200-15,400/mt this week, which is Yuan 200-300/mt higher than last week."
Chinese domestic spot aluminum ingot was priced around Yuan 14,200/mt Tuesday, compared with Yuan 14,020/mt last Tuesday, while September aluminum futures stood at Yuan 14,310/mt on the Shanghai Futures Exchange compared with Yuan 14,110/mt last week.
In Japan, spot trade remained stalled after the US dollar traded at Yen 103.80-104 this week, compared to Yen 102.50-103 a week ago.
Platts lifted its ADC12 export price assessment to $2,200-2,210/mt FOB China Tuesday, from $2,180-2,190/mt FOB China last week on higher bids and offers heard affected by higher primary aluminum ingot and imported scrap prices.
While most market participants retreated, waiting for the US dollar to stabilize, a handful of buyers actively sought November-December loading cargoes in the expectation of tightening supplies in China in the coming months. A Tokyo trader reported buying at $2,210-2,220/mt CFR Japan this week.
Cargoes for November cargoes will be sold out soon, he said.
Another Japanese trader said he was offered $2,190/mt CFR Japan for late November loading, and he was waiting for the dollar to return to Yen 102-103. A third Japanese trader said he was offered $2,210-2,220/mt CFR Japan this week but was not in the market as he wanted to see a longer-term currency trend. Most market participants said they would expect the dollar to hit Yen 105 eventually, but were counting on the possibility of the dollar falling back to Yen 102 again before climbing to Yen 105.
Chinese sources said inquiries from Japanese buyers were extremely low due to the weaker yen.
"Smaller Chinese plants are offering around $2,210-2,220/mt CIF for small quantities. I heard bigger plants are offering around $2,240/mt CIF. Offers in general have gone up due to higher LME prices and production costs," an east China-based producer said.
The price difference between CFR and CIF is negligible.
Another east China-based producer said: "Our offers are at $2,240/mt CIF Japan, up $10-20/mt from last week due to higher LME prices and imported scrap prices are also not easing on tight supply. However, I have no inquiries as the yen has slipped."
Toyota Motor has issued a buy tender for secondary aluminum for the fourth quarter, which will close September 1. Toyota Motor is expected to finalize its October-March 2015 production plan by the end of the week, one diecaster source said. He said Toyota and other automakers were likely to increase October-March output from April-September as car sales typically rise before the end of the Japanese financial year in March. There will be less impact from the April sales tax hike to 8% from 5% as time passes.
Meanwhile, Monday's LME official cash price for aluminum was $2,055-2,055.50/mt, compared with $1,994-1,995/mt last Monday.
Imported offers for Zorba-grade of aluminum scrap were holding steady around $1,800/mt CIF China.
Chinese sources said the supply of 553-grade silicon had also tightened as some producers had switched to making higher-grade silicon metal, as its price had held up in recent weeks as 553-grade prices fell.
Sources pegged tradeable prices of Chinese 553-grade silicon at Huangpu port in a wider range of Yuan 11,800-12,500/mt last Thursday than Yuan 11,800-12,200/mt two weeks earlier.
