PRICING NOTICE: Amendment of spot MJP aluminium P1020 cif premium assessment

Metal Bulletin has amended the spot main Japanese port (MJP) aluminium P1020 cif premium assessment to include more brands and origins from Friday August 3, with a view of capturing increasing alternative-origin transaction liquidity for this regional benchmark.

The decision follows a one-month consultation period, which closed on July 26 and attracted feedback from ten participants (producers, consumers and traders) active on the spot market in Japan.

From August 3, data points on aluminium coming into Japan from India, Brazil, Egypt, Malaysia and Indonesia will be included in the spot MJP assessment, alongside the most-traded origins – Australia and the Middle East – and all other brands that comply with our specifications and those of the London Metal Exchange.

This decision aligns with the views of the majority of those who participated in the consultation and favored the inclusion of non-mainstream origins in the spot MJP premium settlement to add liquidity and reflect the growing market share – albeit still small – of some of these brands in the Japanese market.

Yet, there were concerns among market participants that the inclusion of non-mainstream brands could have a bearish impact on the spot MJP premium because material from these locations is not yet widely traded and accepted in Japan and typically attracts a discount to the most-traded Australian and Middle Eastern brands, which account for the majority of the transacted spot MJP volume in Japan.

For this reason, Metal Bulletin will normalize all data collected to the spot premiums recorded for the most-traded origins using netback rates that will be assessed by its pricing reporters and represent prevailing commercial terms. The netback rates, or discounts as is currently the case, will be calculated in-house using assessments from active market participants in Japan and constantly reviewed. Metal Bulletin also reserves the right to discard data from non-mainstream origins if there are no commonly accepted netbacks.

Metal Bulletin will continue to exclude material sold from LME warehouses and brands that are subject to international sanctions, as is the case for Iran and Russia currently, however; Metal Bulletin will review the treatment of these brands should sanctions be removed. 

New specifications:
Description: Aluminium P1020 spot cif main Japanese ports (MJP)
Price: Aluminium P1020, spot cif main Japanese ports
Type: assessed range
Basis: cif in main Japanese ports at Yokohama, Nagoya and Osaka, premium on top of LME cash prices
Grade: P1020A or 99.7 % Minimum Al purity (Si 0.10% max, Fe 0.20% max) in line with LME specifications
Origin: excluding metal from LME warehouses and metal subject to international sanctions
Currency: USD
Unit: tonne
Min lot size: 100 tonnes
Payment terms: cash against documents (2 days after bill of lading date)
Delivery: within four weeks
Form: Ingot, T-bar, sow
Publication: twice weekly, Tuesday and Friday by 4pm London time
Notes: assessed by the Metal Bulletin’s Singapore office

All historical data relating to this price prior to the amendment will remain available in the pricing section of the Metal Bulletin website.

If you would like to provide feedback on this price or if you would like to provide price information by becoming a data submitter to this price, contact Shivani Singh by email at: pricing@metalbulletin.com. Please add the subject heading “FAO: Shivani Singh, RE: spot MJP aluminium P1020 cif premium”.

To see all Metal Bulletin’s pricing methodology and specification documents go to www.metalbulletin.com/prices/pricing-methodology.

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