🧐 ProPicks AI October update is out now! See which stocks made the listPick Stocks with AI

UPDATE 1-Global aluminium producers offer Q1 premiums of $138-$140/T -sources

Published 02/12/2020, 07:53 pm
Updated 02/12/2020, 07:54 pm
© Reuters.
RIO
-
RIO
-
S32
-

* Offers are up 57%-59% from current quarter's $88/T

* Higher offers reflect solid demand, tight supply, rising freight

* Japanese buyers are seeking lower premiums (Adds details and quotes)

By Yuka Obayashi

TOKYO, Dec 2 (Reuters) - Global aluminium producers have offered Japanese buyers premiums of $138-$140 per tonne for January-March primary metal shipments, up 57%-59% from the current quarter, amid recovering demand, three sources directly involved in quarterly pricing talks said on Wednesday.

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

For the October-December quarter, Japanese buyers agreed to pay a premium of $88 per tonne PREM-ALUM-JP , up 11% from the prior quarter. have received one offer at $138 a tonne and another at $140 a tonne last week," a source at a Japanese trading house said.

The higher offers reflect a sharp recovery in demand, especially from automakers, as well as tighter supplies and rising freight amid tight container market, the source said.

Still, Japanese buyers are seeking lower premiums as it is unclear whether the current pick-up in demand would continue in the January-March quarter and the spike in freight may be a temporary phenomena, another source at an end-user said, pointing that around $125 would be an acceptable level.

The sources declined to be named due to the sensitivity of the talks.

The latest quarterly pricing negotiations began late last month between Japanese buyers and global smelters, including Rio Tinto (LON:RIO) Ltd RIO.AX and South32 Ltd S32.AX , and are expected to continue until later this month.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.