The Chinese domestic price of aluminum alloy ADC12 was assessed marginally higher at Yuan 16,000-16,300 ($2,544-2,592)/mt ex-works Tuesday, compared with Yuan 16,000-16,200/mt a week ago, amid higher offers heard in the market.
Traders said the higher prices were due to a recent increase in aluminum scrap prices, which led to higher production costs.
Leading China producer Sigma Metals raised its offer price to Yuan 17,200/mt on November 30, compared with Yuan 17,100/mt previously, while most non-Sigma offers were at Yuan 16,000-16,400/mt ex-works this week, up from Yuan 15,900-16,200/mt a week ago.
A North China-based trader said he sold ADC12 in the domestic market at Yuan 16,200-16,300/mt ex-works this week.
"Aluminum scrap prices are going up in the US and there have been reduced scrap imports to China as the US consumes more of those raw material at home," he said, adding that the price direction of ADC12 would depend largely on the price of aluminum scrap, which is a major raw material for the aluminum alloy.
But a Guangzhou-based trader said most of his deals were done at Yuan 16,000/mt this week. "Chinese prices failed to move up much due to oversupply in the market," he said.
A third trader said he heard offers at around Yuan 16,400/mt. "But despite higher offer prices, domestic demand has been stable in China," he noted.
Meanwhile, in the export market, the first trader some small quantities of material at $2,170-2,180/mt CFR Japan. "Firmer aluminum scrap prices have raised export offers from China. The price rise, however, has been capped by prolonged weak demand from Japan," he said.
Another trader echoed his view, adding that recent spot deals were settled at $2,130/mt CFR Japan, up $20-30/mt from a week ago. "More traders are raising their offer prices but there has been a lack of deals reported," he said. "It's difficult to find overseas buyers for the Chinese material," he added.
The Japanese buyers said Chinese offer prices were in a wide range of $2,130-2,180/mt CFR Japan, reflecting Chinese producers' different purchasing cost of scrap aluminum imported from the US.
One Japanese trader reported buying less than 500 mt at $2,130/mt CFR Japan, for loading in January.
Platts assessed ADC12 at $2,110-2,150/mt FOB China Tuesday, compared with $2,110-2,140/mt a week ago.