Aluminium producers offer Japanese buyers lower Q4 premiums, sources say
XLB•Quarterly talks continue
The quarterly negotiations between Japanese buyers and global producers including Rio Tinto, South32 and others began last week, and are expected to continue through later this month.
Initial offers for October-December shipments
Top global aluminium producers have offered Japanese buyers premiums of $310 to $325 per metric ton for October-December primary metal shipments, down 18% to 22% from the current quarter, four sources involved in quarterly pricing talks said.
Japan is a major importer of the light metal, and the premiums for primary metal shipments it agrees to pay each quarter over the London Metal Exchange (LME) cash price CMAL0 serve as the regional benchmark.
For July-September, Japanese buyers had agreed to pay premiums of $395 per ton PREM-ALUM-JP, up 12% to 13% from the prior quarter.
Buyers seek lower settlement as supply balances ease
The lower offers for October-December reflect a positive progress report on Middle East production and softer premiums in Europe, a source at a Japanese trading house said.
"While the opening offers were closer to realistic levels than in the previous round, they remained too high given weak spot prices," another source at a Japanese rolling mill said, adding buyers would seek a level below as Asia supply-demand balances ease, partly due to increasing Indonesian shipments.
