Japan Aluminum Shipments May Increase in November, Group Says

Oct. 28 (Bloomberg) -- Japan’s shipments of aluminum rolled products may increase for the first time in 14 months in November as demand from carmakers recovers and the influence of adverse weather on can sales fades, an industry group said. “We expect shipments will probably start increasing in November from a year-ago level,” Koji Iida, head of statistics at the Japan Aluminium Association, said today in an interview. The recovery will be led by the auto and electronics industries as their sales are supported by government incentives, he added. Supplies of Japanese aluminum products to the domestic and export markets plunged by record 23 percent in the first half of this fiscal year, as the worst recession since World War II slashed demand for the metal used in buildings and car parts. The pace of decrease slowed for a seventh month in September as government subsidies and tax cuts helped lift sales of energy- efficient cars and appliances. Shipments in the six months ended Sept. 30 declined to 897,441 metric tons from 1.17 million tons in the same period last year, data from the association showed today. The volume was 32 percent lower than the record high reached in the fiscal first half ended Sept. 30, 1997. “We will have difficulty returning to the peak level as Japanese rolling mills are cutting local output and shifting production bases to abroad because of a contraction in domestic demand,” Iida said in Tokyo. Furukawa-Sky Aluminum Corp., the largest Japanese maker of flat-rolled products, said this month it would take equity stakes in two rolling mills in China to produce auto-related materials from 2010 for sales in Asia and the U.S. Building Slump Sumitomo Light Metal Industries Ltd. will shut its aluminum extrusion plant near Tokyo in March, the Tokyo-based company said Sept. 2, citing a protracted slump in demand from builders. Aluminum product shipments to the construction sector dropped 16 percent in September from a year earlier, at a faster pace than in August, as rising unemployment and wage cuts discouraged consumers from buying houses, Iida said. Shipments to the car industry rose 31 percent from a month earlier to 21,458 tons in September, the biggest volume since November last year. Manufacturers boosted metal purchases to expand production as government incentives raised sales of fuel- efficient cars. Japan’s September vehicle sales rose 3.5 percent from a year earlier, marking a second-straight month of gain. Demand from can makers, the largest consumers of the metal in Japan, fell 20 percent to 28,179 tons last month. Producers reduced output after cool and rainy weather in July and August, an influence from the El Nino weather pattern, helped reduce beverage consumption. Demand will improve as producers reduce metal stockpiles, Iida said. To contact the reporter on this story: Aya Takada in Tokyo at atakada2@bloomberg.net