Tokyo – Global aluminum producers have offered Japanese buyers premiums of $230-$260 per metric ton for January-March primary metal shipments, up 31%-49% from the current quarter, three sources directly involved in quarterly pricing talks said on Friday.
Japan is a major Asian importer of the metal and the premiums for primary metal shipments it agrees to pay each quarter over the London Metal Exchange (LME) cash price set the benchmark for the region.
For the October-December quarter, Japanese buyers agreed to pay a premium of $175 per ton, up 1.7% from the prior quarter.
One producer offered a premium of $230 per ton while another supplier quoted $260 per ton this week, citing concerns over tighter supply in Asia after China said it would cancel a 13% export tax refund for aluminum semi-manufactured products.
To be implemented from Dec. 1, the move could drive up ingot demand from Asian rolling mills outside of China to produce semi-finished products, a source at a global producer said.
The higher offers also reflect rising spot premiums in Japan, he said, where current spot prices are near $200 per ton.
“We were surprised by how strong the offers were, especially the $260 price point,” a source at a Japanese trading house said.
Another source at a Japanese rolling mill described the offers as too high, saying Japanese spot prices are in the $180-$190 range amid sluggish domestic demand.
The sources declined to be identified given the sensitivity of the discussions.
The quarterly pricing negotiations began this week between Japanese buyers and global suppliers, including Rio Tinto and South32, and are expected to continue until later next month.
(Reporting by Yuka Obayashi; Editing by Himani Sarkar and Tom Hogue)
