The premium for aluminum shipped to Japanese buyers from October to December was set at $99 per ton, down 33 percent from the previous quarter, reflecting weak demand and ample inventories, said five sources directly involved in pricing negotiations.
The figure was lower than the $148 per tonne paid in the July-September quarter and marked the fourth consecutive quarterly decline. For the first time since the October-December 2020 quarter, the premium was below $100.
It is also lower than the $115-133 offered initially by producers.
Japan, Asia’s largest importer of light metals, agreed to pay a quarterly premium PREM-ALUM-JP over the London Metal Exchange (LME) cash price CMAL0 for shipments of the primary metal, which sets the benchmark for the region.
The latest quarterly pricing negotiations began in late August with Japanese buyers and global suppliers, including Rio Tinto Ltd RIO.AX and South32 Ltd S32.
The lower premium reflects a series of delays in the recovery of the automotive manufacturing industry due to a global shortage of semiconductors.
“With production resumption by automakers repeatedly delayed and inventories building, buyers are seeking lower premium levels than we initially quoted,” a producer’s source said.
Increased local inventories also underscored the oversupply situation and heightened concerns about a global economic slowdown, an end-user source said.
Aluminum stocks at Japan’s three main ports, AL-STK-JPPRT, rose to 399,800 tons at the end of August from 364,000 tons at the end of July, the highest since November 2015, according to data from Marubeni Corp 8002.
Post time: Oct-05-2022