- Chinese premiums steady despite open import arbitrage window
- MJP unchanged on slow spot demand
- Rotterdam premiums hit more than two-year low on weak sentiment
- US Midwest premiums steady on quiet market
Premiums stable in Asia
Chinese aluminium premiums remained unchanged despite an open import arbitrage window in September.
Fastmarkets’ monthly assessments of the aluminium P1020A premium, bonded, in-whs Shanghai and the aluminium P1020A premium, cif Shanghai were flat on Tuesday at $120-140 per tonne and $110-120 per tonne, respectively.
Sources told Fastmarkets that the overseas market had ample supply, but Chinese demand was limited, adding that significant imports of aluminium were rare over the past month.
“I tried to [offer] CIF Shanghai premiums around $150 per tonne but did not receive any feedback. Chinese buyers seem to only accept premiums around $120 per tonne,” a trader said.
“I think some overseas suppliers who ask for high premiums are a bit idealistic toward the Chinese market. As far as I know, many Chinese traders do not have the intention to buy large quantity of material. There are some inflows of overseas metal, but such trading is far from active,” a Chinese trader said.
The aluminium import arbitrage stood at a gain of $16.87 per tonne on Tuesday, compared with a gain of $10.79 per tonne on September 1.
Elsewhere, the main Japanese port (MJP) premium remained flat during the week amid weak buying interest in Japan.
Fastmarkets’ twice-weekly assessment of the aluminium P1020A (MJP) spot premium, cif Japan was $80-100 per tonne on Tuesday, flat from the week prior.
Most market participants did not see strong support for premiums from the open Chinese import arbitrage window.
“Despite the open Chinese import arbitrage [window], there’s still plenty of supply in the market,” a second trader said.
“Demand for aluminium remains weak, some domestic [Japanese] participants are holding on to excessive stocks. Also, the weakening Japanese Yen is not supporting buying interest,” a third trader said.
Aluminium premiums in South Korea also remained unchanged in a quiet and low-liquidity market.
“Some traders are keeping offers high with the Chinese arbitrage window open, but it is difficult to find big buying interest in [South] Korea. Demand has been really poor,” a market participant said.
Fastmarkets assessed the aluminium P1020A premium, fca South Korea at $130-140 per tonne on Tuesday, unchanged week on week.
Fastmarkets assessed the aluminium P1020A premium, cif South Korea at $110-120 per tonne on Tuesday, also unchanged.
European premiums hit fresh 2023 lows
European aluminium premiums declined across the board in the week to Tuesday, with premiums in Rotterdam hitting fresh 2023 lows.
Fastmarkets assessed the aluminium P1020A premium, in-whs dp Rotterdam at $225-250 per tonne on Tuesday, falling from $240-260 per tonne on September 19 and by more than 12% since the beginning of the month.
Participants said there was an uptick in consumer inquiries in the week to Tuesday, following an extended period of low demand. But those were reportedly being met by several lower offers from sellers eagerly looking to capture liquidity.
“Demand isn’t too bad, and I’ve actually received four inquiries from end users this week. But so have other traders and everyone is fighting to try and secure the business,” one trader in the region said.
“[Activity] comes in these little blips, and everyone gets worked up and tries to offload what they can. When anyone comes to the market, they can have ten people offering them metal,” a second trader said.
The duty-unpaid premium also trended lower in the week while sentiment dipped from lower offers heard in the market and weaker duty-paid premiums.
Fastmarkets assessed the aluminium P1020A premium, in-whs dup Rotterdam at $170-190 per tonne on Tuesday, unchanged from the previous day’s assessment, but dropping from $180-190 per tonne one week earlier.
The premium midpoint is now at its lowest level since March 2021.
In Italy, premiums also tracked lower following fresh transactions reported in the region and downward pressure from weaker sentiment.
Fastmarkets assessed the aluminium P1020A premium, fca dp Italy at $260-275 per tonne on Tuesday, down from $265-280 per tonne one week earlier and falling from $270-295 per tonne at the beginning of September.
United States
Aluminium premium in the US remained unchanged, holding its current range since September 5.
Fastmarkets’ assessment of the aluminium P1020A premium, ddp Midwest US was 19-20 cents per lb on Tuesday.
The spot market remained quiet, with consumers well-supplied under their contractual quotas.
“Nothing is happening in the [spot] market,” one trader said. He added that liquidity in the spot market was limited by lack of buying appetite.
According to sources, the approaching year-end, as well as long-term contract negotiations currently underway, was keeping the premium stable and the spot market quiet.
A second trader said that while there was some spot action, the underlying fundamentals kept the premium rangebound.
