NEWSBREAK: Q2 MJP aluminium premium settles at $148-149/t, hitting six-year high

Fastmarkets’ premium for the supply of aluminium to main Japanese ports (MJP) in the second quarter of 2021 has settled at $148-149 per tonne on top of the London Metal Exchange cash price, the highest since the second quarter of 2015.

The aluminium P1020A (MJP) quarterly premium, cif Japan for the second quarter is up by 14.23% from $130 per tonne in the first quarter of 2021.

It is also 81.10% higher than the second-quarter 2020 premium of $82 per tonne, and is the highest since the second quarter of 2015, when it settled at $380 per tonne.

The settlement is in line with Fastmarkets’ methodology, with more than 30,000 tonnes of deals directly reported by at least one side in the trade, including producer, consumer and trader data submitters.

Multiple deals were reported to Fastmarkets between $148 and 149 per tonne during the negotiation period.

High freight rates, logistics problems and soaring global spot aluminium premiums have supported the rise.

Shortages of metal in Europe and the United States supported higher MJP premiums, with participants around the globe competing for units.

“Producers were not willing to accept any price lower than $148 per tonne as they can deliver to Europe or US for higher premiums there,” one Japanese trader said.

Fastmarkets’ benchmark aluminium P1020A premium, in-whs dup Rotterdam rose to a fresh five-year high of $175-180 per tonne on Friday, up from $170-180 per tonne the previous day.

Meanwhile, the aluminium P1020A premium, ddp Midwest US jumped on Friday to its highest level since June 2018, at 21-23 cents per lb.

Two producers initially offered premiums on top of the LME cash price at $149 per tonne and $165 per tonne respectively while early deals at the beginning of this month were signed at $148 and $149 per tonne.

An open arbitrage window in China also supported the MJP quarterly premium. Fastmarkets reported a positive arbitrage at the end of February, which opened to its widest in the middle of March.

Chinese importers could make a profit of $60.28 per tonne for each tonne of aluminium they brought into the country on March 15, according to Fastmarkets’ calculations.

Sources mentioned cif China deals in mid-March concluded at $165 per tonne while offers soared to as high as $175 per tonne.

Rising premiums in other areas of Asia meant that some MJP sellers were still holding out at $165 per tonne. But after China’s arbitrage window’s closed on March 22, more deals were reported to Fastmarkets at $148-149 per tonne.

Alice Mason in London contributed to this article.