Japan's scrap aluminum dealers suspend spot sales on slumping LME prices

 Japan's spot scrap aluminum trade has slowed, with some dealers suspending spot sales as London Metal Exchange prices continued on a downward spiral, sources said Tuesday.

LME official three-month aluminum contract prices, used as a reference to set scrap prices in Japan, fell to a multi-year low of $1,558/mt Monday, from $1,605/mt on August 3.

The weak LME prices had deterred spot trades of primary and secondary aluminum as buyers moved to the sidelines, particularly for supplies from Russia and other parts of Europe that take more than two months to reach Japan.

In the Japanese scrap market, however, sellers were retreating."LME prices are falling at a fast pace and I cannot keep up with the decline, a central Japan-based scrap dealer said. "I may offer low, but the next day LME prices are lower. So brokers are only supplying term buyers and have suspended spot sales."

Dealers said they felt the lower LME prices were tracking crude oil prices rather than caused by aluminum supply and demand fundamentals. Aluminum production costs are around $1,600/mt and LME prices should have been supported, they said.

"There is limited downside for aluminum, but prices continue to be dragged down, a scrap buyer said. "There is nothing we can do about it but watch."

Comparing the situation,the things in China is better ,for the China Government Policy is a great advantage ,so the export volume is still increasing.