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UPDATE 1-Aluminium producer looks for 30-pct hike in Q2 premium from Japan buyers -sources

Published 20/02/2017, 07:39 pm
© Reuters.  UPDATE 1-Aluminium producer looks for 30-pct hike in Q2 premium from Japan buyers -sources
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* Major producer wants premiums of around $125 per T -sources

* Comes as U.S., Europe premiums climb

* Japan is Asia's top aluminium importer (Adds comment, detail)

TOKYO, Feb 20 (Reuters) - A major aluminium producer has made an indicative offer of a premium of $125 per tonne to Japanese buyers for April-June primary metal shipments, up 32 percent from the last quarter, three sources directly involved in pricing talks said on Monday.

The offer comes as premiums climb in the United States and Europe, and as some Japanese buyers face lower inventories due to healthy local demand.

The sources, who declined to name the producer, did not want to be identified as they were not authorised to speak with media.

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

"A producer sent us an email last Friday with an indicative price of $125, citing higher overseas premiums and lower inventories in Japan," said a source at an end-user in Japan.

U.S. spot premiums and European spot premiums have risen by about $30-40 per tonne over the past three months, according to the sources.

"Given stronger overseas premiums, we will need to accept an increase for the next quarter. But we would aim to get somewhere between $115-120 a tonne," said a source at a trading firm.

For the January-March quarter, Japanese buyers agreed to pay a premium of $95 per tonne PREM-ALUM-JP , up 27 percent from the prior quarter due to higher spot premiums. quarterly pricing negotiations between Japanese buyers and miners, including Rio Tinto Ltd RIO.AX RIO.L , Alcoa Inc (NYSE:AA) AA.N , South32 Ltd S32.AX and Rusal 0486.HK , are expected to continue through next month.

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