Sumitomo Chemical to exit resale business of imported aluminium ingots

SUMITOMO CHEMICAL

19/12/2024 08:04

By Yuka Obayashi
       TOKYO, Dec 19 (Reuters) - Japan's Sumitomo Chemical
 4005.T  said on Thursday it will sell its 2.97% stake in
Brazilian smelter Nippon Amazon Aluminium to YKK AP for an
undisclosed sum and exit the business of reselling imported
aluminium ingots.
    The decision to leave the long-standing business was due to
high volatility in profitability driven by international market
conditions, the company said in a statement.
    Production of high-purity aluminium and alumina at its Ehime
Works in western Japan will continue, Sumitomo Chemical said,
adding that it aims to expand the business, focusing on
value-added sectors, such as semiconductors and life sciences.
    Earlier this year, Sumitomo Chemical sold its 20.64% stake
in New Zealand Aluminium Smelters and its 2.46% stake in Boyne
Smelters in Australia to Rio Tinto  RIO.L   RIO.AX .
    Japanese trading house Mitsubishi Corp  8058.T  also sold
its 11.65% stake in Boyne Smelters to Rio.
    The exit of Japanese companies from the aluminium smelting
sector has shifted the balance of power between global suppliers
and Japanese buyers, a factor that Marubeni  8002.T  predicted
this week would keep Japanese premiums elevated next year.
    Japan is a major Asian importer of the light metal and the
premiums  PREM-ALUM-JP  for primary metal shipments it agrees to
pay each quarter over the benchmark London Metal Exchange (LME)
cash price  CMAL0  set the yardstick for the region.
    In negotiations for January-March shipments, some Japanese
buyers have agreed to pay a global producer a premium of $228
per ton over the benchmark price, up 30% from this quarter and
the highest since 2015.
    Japanese companies have ensured stable procurement of the
metal by investing in overseas smelting operations and securing
ingots through their concessions, but overall imports have
fallen recently to historically low levels amid falling local
demand.

 (Reporting by Yuka Obayashi; Editing by Subhranshu Sahu)
 ((Yuka.Obayashi@thomsonreuters.com; +813-4520-1265;))