Japanese March aluminum stocks down by3pct MoM

Reuters reported that aluminum stocks held at three major Japanese ports eased further at the end of March but remained within appropriate ranges.

Marubeni which collects data from the key ports of Yokohama, Nagoya and Osaka said that aluminum stocks came to 201,200 tonnes at the end of March down 6,900 tonnes or 3.3% from February.

A Marubeni official said that both inflows and outflows were limited as they usually are around this time of the year and stocks are still at an appropriate level around 200,000 tonnes. Stocks in March were 4.4% above the year earlier level.

Stocks may build up in coming months however if demand from end users slackens as a result of last month's devastating earthquake and tsunami, which have dealt a severe blow to Japan's economy.

The official said that the damage to end user demand is still not fully assessed. If their demand weakens aluminum stocks may start to rise in coming months.

Mr Kaoru Yosano economics minister of Japan warned this week that the damage was likely to be worse than first thought as power shortages would cut factory output and disrupt supply chains. Japan which must buy nearly all the metal it needs from abroad, annually imports about 2 million tonnes of primary aluminum widely used in products ranging from computers planes and electronics to the food sector.

Japanese shipments of aluminum products rose 2.3% in February from a year earlier to 168,092 tonnes marking 15 consecutive months of gains but the earthquake is likely to weigh on shipments this month.

While Japan's aluminum sector may see only relatively modest production disruptions from power outages in eastern Japan after the earthquake, demand could shrink from key customers in harder hit sectors such as autos.

The Japan Aluminum Association said that rolling power blackouts last month due to the crippled nuclear plant operated by Tokyo Electric Power Company hampered business and the government should put a cap on electricity use instead.

Japan announced power reduction targets for Tokyo and north Japan that will require big manufacturers and other large scale users to cut peak summer consumption by one-fourth as it vowed to avoid further rolling blackouts that could hobble the economy.

Japan's biggest business lobby said it has asked its member companies to compile electricity saving plans for the summer. Following are details of Japanese aluminum stocks including MoM and YoY comparisons: