Aluminium buyers in Japan are holding out for lower prices amid indications that some initial deals for first-quarter premiums have been struck already at $255 per tonne, above the level of contract deals for the fourth quarter.
“We have done business for Q1 Main Japan Port premium with annual contracts at $255 per tonne,” a major producer source told Metal Bulletin, adding that the volume of shipment was in excess of 500 tonnes per month.
Premiums were agreed at $245-247 for the current quarter, with opening offers for the first quarter from Rusal at $270 and Rio Tinto at $256.
Most producers are now offering the light metal at $255 per tonne for the first quarter, Metal Bulletin understands but consumers are seeking $253 or $254.
A second producer source said he had settled volumes with all buyers but was still negotiating the price. Some of the Japanese traders said they had heard rumours of some deals happening at $255 per tonne but weren’t able to confirm it.
“We had bid $251-252 but [producers] denied us,” a trader from a large firm in Japan said, adding that his bids were now at $253-254 per tonne.
A second trader source from another large trading firm said: “We have not concluded yet […] our bids are at $253-254 per tonne and we should settle sometime next week before shipments.”
A third trader said they had bid $255 to Rio Tinto and was waiting for their response as they had earlier offered $256 per tonne.
The second producer source said he expects first quarter MJP to be $255 per tonne, citing high spot premiums in China and a tightness in the aluminium market in Japan with demand remaining stable.
Producers were asking for $275 per tonne Shanghai cif in the spot market and buyers were willing to settle at $265 per tonne, he said.
[This article was amended on Dec 11 to correct the number given for premiums in the current quarter to $245-247. The number was previously given, incorrectly, as $244-245.]
Aluminium buyers in Japan are holding out for lower prices amid indications that some initial deals for first-quarter premiums have been struck already at $255 per tonne, above the level of contract deals for the fourth quarter