Japan Primary Al Premium to Drop to US$ 122-125/t in April-June

Japanese primary aluminium premium negotiation is expected to be settled at US$ 122-125 per tonne for April-June shipment at the negotiation between Japanese buyers and offshore suppliers. The premium decreases from US$ 128-133 for January-March, which is the first drop since April-June 2009. The premium peaked when the supply gets less tight in Asian market under supply restart from Russia.

Australian suppliers offered US$ 130 per tonne for April-June to Japan at first. Japanese buyers resisted the high premium level and sought US$ 120 premium under slow domestic demand and less tight supply. European traders showed intention potential premium down for Japanese buyers. Australian suppliers also compromised.

According to sources, Asian aluminium ingot supply already increased when UC RUSAL restarted the supply to the area and Middle East suppliers try to increase the supply mainly to Southeast Asia. The premium decreased to US$ 117 per tonne at tender by South Korean public procurement service in early March.

Japanese industry expects the premium would decrease more in July-September when the supply gets easier due to higher supply from Middle East and inventory registered to London Metal Exchange under stable demand in Asia.