Japan aluminum buyers said to pay record fee on output cut

According to three executives who represent buyers and sellers, aluminum buyers in Japan, Asia’s biggest importer, agreed to pay premiums of USD 420 per tonne in the coming quarter, that’s up from a range of USD 400 to USD 408 per tonne this quarter and a record high for a fourth consecutive time.

The executives said that buyers in Japan will pay the surcharge above the London Metal Exchange cash price for the three months beginning in October. Japanese buyers and suppliers negotiate the premiums quarterly.

Alcoa Inc said that it will permanently close an Italian factory that it says is too expensive to operate, reducing its annual smelting capacity by 150,000 tonnes to 3.6 million tonnes.

Goldman Sachs Group Inc said recently that the aluminum industry has closed or curbed output at more than 50 smelters outside of China since 2009 and global demand will exceed output by 579,000 tons this year and 619,000 tonnes in 2015.

Mr Naohiro Niimura, partner at Market Risk Advisory Company said that “Rising costs for electricity and labor will accelerate output cuts. Worldwide production will almost be balanced with consumption this year, revising his prediction in June for 1.21 million tonne surplus.”

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