UPDATE 1-Japan May aluminium stocks dip for third month

TOKYO, June 11 (Reuters) - Aluminium stocks held at key Japanese ports fell for the third month in a row largely due to a sharp decline in imports of the metal used by the transport and packaging industries, nearing levels market players consider appropriate. Japan's demand for aluminium and other industrial metals began to plunge late last year as automakers and other big manufacturers, hit hard by the nation's worst recession since World War Two, began cutting production. An official at trading house Marubeni Corp (8002.T), which provided the data, said stocks had dropped on a fall in imports rather than on a rise in domestic demand for the metal, but he said stocks may fall to favourable levels by next month. "Imports (in May) are probably about half year-earlier levels... and that has had a significant impact on stock levels," he said. Stocks held at three major Japanese ports totalled 243,300 tonnes at the end of May, down 52,300 tonnes or 17.7 percent from a month earlier, Marubeni said. Stocks, down about 35 percent from a 10-year high marked at the end of February, have been falling month-on-month since March. Imports of aluminium in April, the latest month for which trade figures are available, fell more than 50 percent from a year earlier to a little over 80,000 tonnes. For details on Japan's port stocks and imports, click on: here Government trade data for May will be available at the end of June. End users have been aggressively using up their stocks, rather than making fresh purchases. Japan's aluminium product shipments rose for the second month running in April, however, suggesting an improvement in business conditions, although the recovery was still weak as shipments continued to fall heavily compared with a year earlier. [ID:nT286257] The Marubeni official said 200,000 tonnes, roughly equivalent to Japan's demand for one month, was probably a suitable level for aluminium port stocks. "I think we might near that level in June," he said. Some industry officials said they would be importingaluminium in the July to September quarter, which would be their first purchase of the metal this year, in another sign that demand may be slowly returning. Japan is in the final stages of term talks to purchase aluminium metal for the third quarter. [ID:nT114452] Marubeni collects data from the key ports of Yokohama, Nagoya and Osaka. Following are details of Japanese aluminium stocks, includingmonth-on-month and year-on-year comparisons (in tonnes): 　　Yokohama Nagoya Osaka Total May 31 122,000 107,800 13,500 243,300 Apr 30 142,300 140,300 13,000 295,600 Mar 31 163,400 164,000 11,200 338,600 Feb 28 172,800 186,800 15,000 374,600 End-May 2008 87,500 97,200 12,000 197,700