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    Japanese aluminum stocks hit all-time high, putting pressure on prices

  • China Aluminium Network
  • Post Time: 2015/1/29
  • Click Amount: 436

    Aluminum stocks had risen to 413,000-419,900 mt in Japan, which is an all-time high, putting pressure on local prices as some companies want to destock before March, the end of the Japanese financial year, market sources said Monday, January 26.

    Aluminum stocks at three main Japanese ports had swollen by the end of December, according to trading house surveys.

    Some recent buy tenders settled low as a result, traders said.

    Two Japanese consumers were seeking 500-1,000 mt lots via tender last week, traders said. They were seeking deliveries into Nagoya and Yokohama.

    One buyer was asking for March delivery, while the other was looking for February-March.

    The deal for March delivery was awarded at below Yen 260 ($2.23)/kg ex-warehouse, a Japanese trader said.

    This includes the LME price, import premium, interest rate fee, the fee for moving the metal from port to warehouse, and other handling fees.

    Payment is typically a month after delivery of the metal.

    The trader said that the import premium would come to less than $400/mt on the basis of an interest rate at 0.5-1% and the dollar at Yen 116-117.

    The second deal for February-March was above Yen 260/kg ex-warehouse, another trader said.

    It was on the basis of LME price at $1,790-1,800/mt, import premium of $350-360/mt, interest rate of around 1.5%, and the dollar at Yen 116-117.

    Platts has not been able to confirm the tender results with consumers.

    Most other local spot deals last week were for smaller lots and were generally heard in the range of Yen 260-270/kg ex-warehouse.

    Premiums were around $370-400/mt, traders said.

    "There are some consumers, buying volumes from 20 mt to 500 mt, interested to book February deliveries should LME fall back to around $1,800/mt," said a third trader.

    He said possible deals are at Yen 260-270/kg ex-warehouse. The breakdown of Yen 260-270/kg was LME price at $1,800/mt, premiums of $380-400/mt, interest rate of 2%, fee for transporting metal from port to warehouse Yen 2,000/mt, and the US dollar at Yen 118.

    However, depending on the LME prices, exchange rate and other market conditions, $420-425/mt premiums were still achievable, some said.

    A deal was reported done around Yen 270/kg ex-warehouse for a 100-200 mt lot, March delivery. "The premium would come to $400-425/mt for this particular deal," a trader said.

    No spot imports deal, bid or offer were reported, due to sufficient stocks, and the Japanese spot import premium assessment stood at $425/mt plus LME cash CIF Japan Monday, unchanged since January 20.

    "There is zero spot demand," said a producer source.

    "Why buy spot when we settled first quarter contracts only last week," said a trader.

    Domestic all-in-one deals were not taken into the import premium assessment as the premium values were estimates and would vary depending on what the LME prices, interest rate and exchange rate were.

    Source: http://www.platts.com
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