Producers Seek Aluminium Premium Of USD 115-120 From Japanese Buyers

Reuters quoted three sources involved in quarterly pricing talks as saying that top aluminium producers have offered Japanese buyers premiums of USD 115 to USD 120 a tonne for July to September primary metal shipments, up 10% to 14% from the current quarter, amid tighter supply.

Japan is Asia's biggest importer of the metal. The premiums it agrees to pay each quarter for primary metal shipments over the London Metal Exchange cash price set the benchmark for the region.

For the April to June quarter, Japanese buyers agreed to a premium of USD 105 per tonne , up as much as 27% from the prior quarter, marking the first increase in three quarters. A source at one end-user said that "We have received one offer at USD 120 a tonne and another at USD 115 last week.”

Source said that the higher offers reflect fewer shipments of semi-fabricated metal, or semis, which can be melted down for use as primary metal, from China to other Asian countries due to stronger aluminium prices on the Shanghai Futures Exchange.

Still, Japanese buyers are seeking lower premiums due to lacklustre demand from domestic manufacturers, some of whom have customers in the semiconductor and machine tool sectors in China, where demand is slowing, a source at a producer said.

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