Global aluminium producers are negotiating premiums with Japanese buyers for primary metal shipments in the January-March quarter, proposing rates between $230 and $260 per metric ton. This represents an increase of 31% to 49% from the current quarter, according to three sources involved in the pricing discussions.
Key Highlights:
Premium Increases:
The proposed premiums for Q1 are significantly higher than the $175 per ton agreed upon for the October-December quarter, which marked a 1.7% increase from the previous quarter.
One producer has quoted a premium of $230 per ton, while another has suggested $260 per ton.
Market Influences:
The rise in premiums is attributed to concerns about tighter supply in Asia, particularly after China announced it would cancel a 13% export tax refund for aluminium semi-manufactured products, effective December 1. This could increase demand for ingots from Asian rolling mills outside of China.
Current spot prices in Japan are nearing $200 per ton, indicating a robust market.
Mixed Reactions:
A source from a Japanese trading house expressed surprise at the strength of the offers, particularly the $260 price point.
Conversely, a representative from a Japanese rolling mill deemed the offers too high, noting that spot prices are currently in the $180-$190 range due to sluggish domestic demand.
Ongoing Negotiations:
The quarterly pricing discussions began this week between Japanese buyers and global suppliers, including major players like Rio Tinto and South32. These negotiations are expected to continue into next month.