Buyers in Japan have settled annual contracts for 6063 aluminium billet at premiums in the $160-200 per tonne range, Metal Bulletin has learned.

“Over 85-90% of domestic customers are 6000-series buyers and use billets for making extrusion profiles,” an importer said.

The 6063 is known as the Japanese Industrial Standard or JIS.

The all-in cost for buyers in Japan has three components – the London Metal Exchange aluminium cash price, the quarterly main Japanese ports (MJP) premium benchmark for primary aluminium imports and the billet premium.

Depending on the contract terms, the all-in cost could include the MJP on a floating basis or a fixed basis.

“The quotational period also depends on the customers who buy the billets from the importers and may depend on the shipping month or the delivery month,” a market participant explained.

“The extrusions market in Europe and the USA is tight so Japan had to pay higher premiums for 2015 to secure material,” a market participant said.

For 2014, the premiums were about $160 per tonne, buyers said, without divulging the exact number.

In Southeast Asia, negotiations were continuing over a figure of $155-170 per tonne, a trader in Singapore said.

“We have done deals at $160-180 in Japan and at the same levels in South Korea,” an aluminium producer said.

“In Taiwan, deals were $5 lower than in Japan,” the producer added.

The producer reiterated that billet shortages had caused a spike in premiums from the $140-160 level seen in Japan this year.

Metal Bulletin assessed the 6063 aluminium extrusion billet premium at $800-850 per tonne in-warehouse Rotterdam last week, from $820-870 a week earlier.

Shivani Singh
Twitter: @ShivaniSingh_MB 

Deepali Sharma