Japan Aluminum Shipments May Decline to 23-Year Low

March 27 (Bloomberg) -- Japan’s shipments of aluminum rolled products are forecast to decrease 11 percent next fiscal year to the lowest in 23 years because of a slump in demand from carmakers and machinery producers, an industry group said. Shipments, including exports and domestic business, may drop to 1.80 million metric tons in the year beginning April 1 from an estimated 2.03 million tons this fiscal year, the Japan Aluminium Association said today in a statement. It is the third straight year of decrease and the volume would be the lowest since the year ended March 1987, according to the association. Aluminum demand in Japan, Asia’s largest importer, is deteriorating as the world’s second-largest economy heads for its worst recession since 1945, spurring manufacturers to cut output and reduce their workforce. Exports plunged by a record 49.4 percent in February as deepening slumps in the U.S. and Europe slashed shipments of Japanese cars and electronics. “Our industry will be in a tough situation again next fiscal year,” Hiroshi Yao, chairman of the association, told reporters in Tokyo today. Contraction in shipments may begin to slow in July as manufacturers will probably complete inventory adjustment by the end of June, Yao said. Still, demand may not improve much as sales of cars, electronics and houses may not recover, he added. The pace of decrease in demand from the auto industry may slow to 30-40 percent in the July to September quarter, compared with a year earlier, after inventory adjustment, according to the association. Shipments of aluminum products to carmakers tumbled 69 percent in February. Auto Demand “Demand from the auto sector next fiscal year may be about 25-30 percent below the level of this year,” Yasuhiko Noguchi, the association’s secretary general, said today in Tokyo. In February, Japan’s shipments of aluminum rolled products tumbled 39 percent to 112,991 metric tons from a year earlier. It was the fifth straight month of decrease and the largest drop since March 1975.