Aluminum UBC market is on a weak trend both for can materials and for deoxidizing agent. As Novelis already finished their purchase even for the shipment in June, UBC prices are expected to drop further.
LME aluminum price had increased to $1,930/t during so-called Golden Week, the Japanese long holiday, but it started to drop after May 6. The 3-month future price remains at $1,885/t at the moment. NSP had also risen to 318yen/kg on May 6, but it remains at $308yen/t now on 14 May , dropping to the levels seen at the end of April.
Although the price of high grade aluminum scrap rose partly for sash manufacturers due to the price rise during the Golden Week, the scrap price for aluminum alloy manufacturers didn’t rise, remaining at the level seen in late April. However, according a trader of aluminum scrap, “the price is more on a downward trend than flat. The demand for scrap from secondary aluminum alloy manufacturers is week as they hold some stocks. Their demand for aluminum can scrap (UBC) is far lower. Buyers’ interests are low both for RSI and for deoxidizing agent. The mainstream of the UBC prices for domestic manufacturers is at the mid-160yen/kg level, but it will drop further.”
In fact, the trader said that they had an offer for 200-300 tons of UBC from a dealer. The fact that price-sensitive scrap dealers are in a hurry to sell their stocks indicates the future of the UBC market.
Previously, the price differential of UBC was seen temporarily between eastern Japan and western Japan, but it is not seen at the moment. The price is at 165-168yen/kg. Meanwhile, as the price of containerized UBC for Korea was at 175yen/kg (with contract till the end of May), many dealers raced for exporting. The purchases from Korea, which is not as much as 5,000t/m as before (3,000t in May), for shipment not only in May but also in June, had already been finished as noted above. The trader said that the price for June, which will be set in the coming days “will be lower than that for May.”
As more UBC is generating in the coming season, the downward trend of UBC price will continue.