Japanese aluminum buyer, producer gap widens as buyer skips Q1 shipments

Japanese aluminum buyers and overseas producers drifted further apart Monday as first quarter premium negotiations entered a fourth week after one buyer opted to skip Q1 shipments and producers continued to seek a hike in premiums, market sources said.

One Japanese buyer has decided not to buy any imported aluminum ingot, billet or slab for Q1 on a contract basis amid ample stocks in Japan. The decision is expected to impact at least 10,000 mt of aluminum imports.

Stocks at three main port warehouses swelled to a 10-year high of 478,000-485,000 mt at the end of November, Platts reported last week.

A Japanese trader said there were at least two end-users skipping Q1 shipments from his company as well, although he still plans to purchase Q1 requirements on contract as usual.

While Japanese buyers reduce volumes, a producer has asked buyers for a hike in Q1 premiums to $440/mt plus London Metal Exchange cash CIF Japan, up from $420/mt for the current quarter, traders said. The producer could not be reached for comment.

Two other producers offered premiums of $435-440/mt plus LME cash CIF Japan a week ago.

A second Japanese trader said he was eyeing $390/mt plus LME cash CIF Japan for Q1.

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