Metals News
UPDATE 2-Japan Feb Aluminium Shipments Up 2.3 Pct Yr/yr
industry news
Mar 30,2011

TOKYO, March 29 (Reuters) - Japanese shipments of aluminium products rose 2.3 percent in February from a year earlier to 168,092 tonnes, marking 15 consecutive months of gains, but a devastating earthquake is likely to weigh on shipments this month.

Shipments in February rose 7.3 percent from January after two straight months of declines, the Japan Aluminium Association said on Tuesday.

Japan's aluminium industry may see only relatively modest production disruptions from power outages in eastern Japan after this month's devastating earthquake, since much of its capacity is in the undamaged west, but demand could shrink from key customers in harder-hit sectors such as autos.

"Facilities at our member companies were not severely damaged, but the outlook for demand has been clouded by the damages incurred at our client companies, making it difficult to forecast the next financial year," an industry official told reporters.

The March 11 earthquake and tsunami has left 28,000 people dead or missing, paralysed a nuclear plant, crippled infrastructure and suspended manufacturing operations in northern Japan.

Rolling power blackouts due to the crippled nuclear plant operated by Tokyo Electric Power Co were hampering business, the association official said.

"We (the aluminium industry) are planning to ask the government that a cap on electricity use is applied rather than rolling blackouts," the official said, adding that a blackout stops an entire production line for a whole day.

As of February, demand for aluminium products for the financial year ending this month was forecast at 2.073 million tonnes, above the association's initial estimate of around 2 million tonnes.

Domestic demand for flat-rolled aluminium shipments was sluggish in February, hurt by the end of government subsidies late last year for the purchases of environmentally friendly cars. But exports were still robust, due to demand in China and Southeast Asia, the association said.

A pick-up in new home construction has helped aluminium extrusion use grow at a double-digit rate for a fourth straight month, although volume remains low, it said.

Amid the uncertainty over demand after the earthquake, term premiums for primary aluminium shipments to Japan for the April-June quarter were mostly set at $113 per tonne.

That was flat from $112-113 for the current quarter, pausing for the first time after falling for four consecutive quarters.

Japan, which must buy nearly all the primary aluminium it needs from abroad, imports about 2 million tonnes a year of the metal, which is used widely in products ranging from computers, planes and electronics to food packaging.

Aluminium stocks held at three major Japanese ports at the end of February fell 5.7 percent from a month earlier to 208,100 tonnes, reflecting low import volumes, trading house Marubeni Corp said earlier this month.

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