CRU aluminum: China eyes property recovery, UACJ expects North America can stock, autos to improve

China introduces measures to fix property crisis

China announced a series of measures to reinvigorate its property industry after the latest data showed housing prices slumped nearly 10% since the start of the year. Among them, the central bank said it would reduce the minimum down payment for mortgages and remove the floor on interest rates for first and second homes.

The announcement by the People’s Bank of China said that, effective May 18, the interest rate for first-time housing provident fund loans for under five years will be cut by 0.25 percentage points to 2.35%. The rate for loans over five years was reduced by 0.25 percentage points to 2.85%. Minimum down payments for loans for first homes will be reduced from 20% to 15% of the purchasing price. For second homes, it will be 25% down from 30%, the report said.

UACJ improves profitability despite lower volumes at FY2024 results

Japanese aluminum product manufacturer, UACJ, released its FY2024 results for its fiscal year ending in March.

The group reported sales volumes of 1.19 million metric tons (mt), down 98,000/mt from the previous year. For can stock, UACJ said the drop occurred mainly in H1 as restocking resumed in H2. For automotive products, the group noted a steady improvement in sales amid a recovery in production; and for thick plates UACJ noted the impact from inventory correction used in semiconductor production equipment.

The lower sales volumes did not stop the company from improving its operating profit, up by ¥20.1 billion to ¥31.4 billion and its business profit by ¥22.1 billion to ¥43.4 billion. For these increases, the company thanked the effects of price revisions and manufacturing cost improvement measures. Adjusted EBITDA came in at ¥79.8 billion, up 42% year over year (y/y), amid revenue of ¥892.8 billion, down 6.5% y/y.

As for its forecast for the upcoming fiscal year, UACJ expects demand for beverage can stock to be flat in Japan. The company is optimistic regarding automotive products as domestic production has normalized. Meanwhile, for thick plates the group expects a gradual recovery, in line with progress in the construction of semiconductor manufacturing facilities.

However, as for its business in North America (TAA), UACJ expects that demand for can stock will increase as the inventory correction is “almost over.” Furthermore, the North American automobile market is on a recovery trend, UACJ said, with no change in trend toward the increasing use of aluminum in automotive components.

Finally, in the rest of Asia, inventory corrections for customers in Southeast Asia will be resolved, UACJ said, leading to a “moderate” recovery in demand for can stock. Demand for can stock in India, the Middle East, and Africa is expected to grow going forward, the company concluded.

Learn more about CRU’s services at www.crugroup.com.