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Participants expect the automotive industry’s demand for the light metal to accelerate in the latter half of 2024, after demand arising from automotive production had been damped by certification issues and recalls earlier in the year.
Three Toyota models that were suspended since June 3 are scheduled to resume production from the beginning of September with the Ministry of Land, Infrastructure, Transport and Tourism confirming their compliance with the standards.
“The automotive sector faced production problems in the second quarter due to certification testing, but with the recent announcement of the certification test having concluded, we’re seeing that production volumes will increase in the third quarter [of the financial year],” a trader told Fastmarkets.
“Aluminium demand from the automotive industry has been stable, but we’re still anticipating a gradual recovery,” a second trader said.
In its latest results, Toyota, Japan’s leading car manufacturer in 2023, produced 1,508,416 units in the country in the first six months of 2024, down by 8.2% in the same period in 2023 amid the certification issues and production suspensions.
Domestic production in June stood at 254,010 units, a 18.8% year-on-year fall.
The automotive sector remains the biggest demand driver for aluminium in Japan, accounting for 42.9% of total demand of the light metal in the first five months of 2024, with 642,300 tonnes used in the transportation sector in that period, rising by 0.2% from 640,700 tonnes in the same period in 2023, according to the Japan Aluminium Association.
Separately, Japanese automobiles face rising competition from Chinese automobiles, particularly with the shift towards new energy vehicles and intense price competition.
Multiple Japanese automakers in recent reports posted dips in global sales, including to China.
Meanwhile, exports of motor vehicle units from Japan in January-June 2024 stood at 2,017,660 units, down by 0.3% from 2,023,425 units in the same period of 2023, according to the Japan Automobile Manufacturers Association.
Reflecting the light metal’s growth potential stemming from the automotive sector in Japan, Fastmarkets has amended its aluminium P1020A (MJP) spot premium, cif Japan from a twice weekly publication to a daily publication starting on Wednesday August 7, following a market consultation.
Fastmarkets assessment of the aluminium P1020A (MJP) spot premium includes domestic tenders and deals from the Japanese market following feedback from the consultation that it would improve liquidity and provide further supporting information to the pricing process.