Global aluminium producers seek Q2 premiums of $220-$250/T from Japan buyers, sources say

Reuters
Yesterday
UPDATE 1-Global aluminium producers seek <a href="https://laohu8.com/S/QTWO">Q2</a> premiums of $220-$250/T from Japan buyers, sources say

Adds quotes and details in paragraph 4-9

By Yuka Obayashi

TOKYO, Feb 26 (Reuters) - Global aluminium producers have offered Japanese buyers premiums of $220 to $250 per metric ton for April to June shipments, up 13% to 28% from the current quarter and reflecting higher overseas premiums, three sources said on Thursday.

Japan is a major Asian importer of the metal. 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.

For the January-March quarter, Japanese buyers agreed to pay a premium of $195 per ton PREM-ALUM-JP, up 127% from the prior quarter, reflecting fears over tightening supply.

"Premiums in the Unites States and Europe remain elevated, requiring a higher premium level than in the current quarter to bring the metal into Asia," one of the sources at a producer, involved in quarterly pricing talks said, citing particularly high U.S. premiums due to low inventory levels.

"Japan's domestic demand is still subdued, but expectations for a recovery from April - after fiscal year-end inventory adjustments - also support our decision to offer a higher premium," he added.

Buyers, however, said the offers were too aggressive.

"Demand remains sluggish and the offers are too high," a second source at a Japanese trading house said, adding that buyers would seek lower levels.

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

Quarterly pricing negotiations began this week between Japanese buyers and producers including Rio Tinto RIO.AX, RIO.L and South32 S32.AX.

Talks are expected to continue through next month.

(Reporting by Yuka Obayashi, Editing by Louise Heavens and Nivedita Bhattacharjee)

((Yuka.Obayashi@thomsonreuters.com; +813-4520-1265;))

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