TOKYO: Japan’s UACJ and Nippon Light Metals the direct impact of the 10% aluminum tariff on the companies is limited as they run manufacturing operations in the US and do not export either aluminum ingot or aluminum products.
Showa Denko, on the other hand, said their exports of cast aluminum products accounted for less than 10% of its total aluminum business, the company’s spokeswoman Tomoko Yazaki told S&P Global Platts.
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Japan’s customs data showed that Japan’s biggest export to the US in 2017 was 23,452 mt of aluminum alloy sheets. Rod, tube, wire and other items were generally less than 1,000 mt for the whole year.
Japan’s total aluminum products output is around 2.5 million mt annually. US trade data showed that Japan had exported only 115 mt of unwrought aluminum products (code 7601) in 2017. Japan Aluminum Association said on March 9 that the US was exporting more to aluminum to Japan, and that the US has a “trade surplus” with Japan.
“We recognize China’s efforts in the last few years to curb overcapacity through environmental controls, and market is making steps toward achieving fair competitive environment. We urge China to continue its policies and we are open to help and work with China through technology assistance,” Showa Denko’s Yazaki said.
Japanese market sources, however, raised concerns over a lack of visibility caused by the tariff.
“We are not supportive of the tariff. In theory, aluminum that failed to reach the US will hit Asia, and Asian market will be thrown into confusion,” Sawachi said. One possible scenario is lower aluminum product prices in Asia as China is expected to direct its exports to Asia.
Japanese market sources, however, said Japanese industry was unlikely to resort to protectionist solutions in the near term.
“Imports into Japan are limited because Japan has different quality standard,” spokeswoman for Japan’s largest rolling mill UACJ Ryu Sawachi said. Another rolling mill official, however, said Chinese products are expected to gain market share in Japan in a few years and the industry needs to monitor them closely.
Two international traders said they have noticed an increase in requests for long term aluminum ingot supply contracts, stretching from second half 2018 to 2019, and a few into 2020, from Japanese buyers.
These buyers fear a possible tightening of Australian and Middle Eastern supplies in Asia due to the US tariff exemptions on Australian aluminum.
