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UPDATE 1-Some Japanese aluminium buyers agree to Q4 premium of $75/T -sources

Published 08/09/2016, 08:34 pm
Updated 08/09/2016, 08:40 pm
© Reuters.  UPDATE 1-Some Japanese aluminium buyers agree to Q4 premium of $75/T -sources
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(Adds comments from buyer, producer)

By Yuka Obayashi

TOKYO, Sept 8 (Reuters) - Some Japanese aluminium buyers have agreed to pay producers a premium of $75 per tonne for shipments in the October-December quarter, reflecting softer spot premiums, two sources directly involved in the quarterly pricing talks said on Thursday.

The deal, which marks a 17 to 19 percent fall from the $90 to $93 per tonne premiums PREM-ALUM-JP in the previous quarter, is the second straight quarterly drop and the lowest in more than seven years.

Japan is Asia's biggest importer of aluminium and the premiums for primary metal shipments it agrees to pay each quarter over the London Metal Exchange cash price CMAL0 set the benchmark for the region.

The latest quarterly pricing negotiations began last week between Japanese buyers and global producers, including Alcoa Inc (NYSE:AA) AA.N , Rio Tinto RIO.L RIO.AX and South32 Ltd S32.AX , with initial offers ranging between $80 to $82 a tonne. struck the deals at $75 a tonne with three producers over the past week," a buyer source told Reuters, declining to be named due to the sensitivity of the talks.

"Several buyers have agreed to sign contracts at $75 a tonne," another source at a producer said, but added that the majority of its customers have not yet signed.

Other buyers are still negotiating with global smelters, with many seeking premiums in the low $70 a tonne range, given the high level of local stock and slack demand in housing and construction in Japan. Further deals are expected in the coming weeks.

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