Secondary aluminum alloy market outlook promising
----Interview with Howard Lee
Sales & Purchase General Manager
JEIL Industrial Co., Ltd.
Sales & Purchase General Manager
JEIL Industrial Co., Ltd.
JEIL Industrial Co., established in 2006, is a South Korea-based trading company of aluminum ingot, aluminum billet, aluminum scrap, copper ingot, copper scrap, silicon metal, magnesium ingot, zinc ingot and lead ingot, etc. The trading business covers over 45 countries in the world, with the revenue amount of USD80 million per year.
Asian Metal: Welcome to Asian Metal's interview Howard. Please give a brief introduction of JEIL Industrial at first.
Howard Lee: JEIL Industrial is a trading company based in South Korea and deals with assorted grade of non-ferrous metals with the total trading volume of around 4,000tpm on average, including aluminum ingot, aluminum billet, aluminum scrap, copper ingot, copper scrap, silicon metal, magnesium ingot, zinc ingot and lead ingot, etc. The volume of aluminum products accounts for around 3,500tpm on average. Our businesses cover more than 45 countries. For example, we sell African aluminum ingot to countries like Indonesia and Japan. We sell aluminum ingot to many European countries. In terms of aluminum, China, of course, and Indonesia are our major export destinations, with the total ratio accounting for around 60%.
Asian Metal: The aluminum alloy export from Russia is restricted due to the Ukraine-Russia conflict. Does that bring any opportunities to you?
Howard Lee: Yes. Because of the restriction, Russia could not export aluminum ingot to Japan and some European countries. Therefore, we could purchase more aluminum ingot from Russia at cheaper prices, with the monthly average volume at around 200t in 2022, up from around 50t in 2021. The purchase prices for ADC12, for example, kept at around USD2,100/t CFR China in early December of 2022, lower than USD2,200-2,300/t from other countries during the period.
Asian Metal: How about the freight in 2022 compared with 2021?
Howard Lee: I think the freights of major shipping lines declined a lot because the demand was not as strong as that in 2021. For example, for aluminum billets, the freight from South Korea to Europe in the middle of December, 2022 stood at around USD2,500 per container compared with around USD12,000 per container in late 2021.
Asian Metal: As a major sales market of you, the mainstream import prices of secondary aluminum alloy ingots in China slumped quickly in Q2, 2022 but rebounded in Q4. How do you think of the reasons behind that?
Howard Lee: In Q2, Shanghai was attacked by the pandemic and most end users of secondary aluminum alloys in east China halted or cut production, leading to sluggish demand. From Q4, the lockdown policy eased gradually and end users restarted operations slowly, which encouraged the market confidence and drove the prices to go up. For example, in the first week of December, our sales price of ADC12 reached USD2,400/t CFR China, up from USD2,300/t from late November.
Asian Metal: How do you think of the secondary aluminum alloy ingot sales in 2022 compared with 2021?
Howard Lee: As a whole, our sales volume of secondary aluminum ingot reached around 24,000t in 2022, up from around 18,000t in 2021.
Asian Metal: Since the global market is recovering from the pandemic gradually, how do you think of the secondary aluminum alloy market in 2023?
Howard Lee: As a trader, I discover new suppliers and new buyers every day to keep our sales increasing steadily. We expect higher sales volume in 2023 as mentioned above, since China has optimized the COVID-19 control policy. My expectation for sales volume in 2023 is about 30%higher than that in 2022, as the global economy will get better and the demand will improve, especially the demand in China will grow after adjustment on the pandemic control.
Asian Metal: As you mentioned that your company also has business of aluminum products in South Korea, how was the demand in 2022?
Howard Lee: The demand in South Korea was quite sluggish. For the domestic market, we mostly sell the raw materials to the factories and buy the end products. For example, we sell aluminum scrap and silicon metal to aluminum alloy plants where I buy aluminum alloy ingot from. The sales volume in South Korea is only around 300tpm on average in 2022, accounting for less than 10% of the total sales.
