Japanese Q3 2025 aluminum premium dips 40.66% QOQ to $108/mt CIF Japan

Platts, part of S&P Global Commodity Insights, assessed the third-quarter premium for imported primary aluminum to Japan at $108/mt plus London Metal Exchange cash, CIF main Japanese ports, on June 26, down 40.66% from $182/mt in the second quarter.

The Q3 MJP premium assessment was based on nine reported trades between May 30 and June 26. All deals were concluded at $108/mt with a total minimum volume of 14,000mt/ month, plus LME cash CIF Japan, for seaborne P1020/P1020A ingot for loading over July to September.

Offers heard during the negotiations sat in a range of $130-$145/mt CIF Japan, 20-29% lower than the settled Q2 MJP level of $182/mt. The lowest offer level reported for the third quarter, however, was 20% higher than the concluded Q3 MJP level of $108/mt.

Buyer expectations for the third quarter MJP were reported at $105-$115/mt, according to market participants.

Market participants said that demand from the building and construction sector, as well as the automotive sector, had been weak. Demand from the automotive sector has been affected by the US' 25% automotive tariffs effective April 2. Some market participants said they expected a further decline in demand in the coming months as a result of the tariffs.

Meanwhile, the increase in US aluminum tariffs from 25% to 50% effective June 4 has led to reduced interest in exporting to the US, and an overall supply surplus in Europe and Asia. Market feedback suggested that replacement costs for cargoes headed to the US would be around 70-75 cents/lb plus LME cash, considering the 50% tariffs. However, Platts spot US Aluminum Midwest Premium June 25 was at 55.55 cents/lb plus LME cash, delivered Midwest, close to 20 cents/lb below the replacement cost.

On June 26, Platts assessed the CIF main Asian ports (MAP) spot P1020 aluminum premium at $100/mt plus London Metal Exchange cash, unchanged day over day but down $105/mt from the start of 2025 and $72/mt from the start of the quarter.

On the supply side, two projects are expected to be commissioned in Q4 this year. PT Kalimantan Aluminum Industry is expected to commission its first phase of production by the end of 2025. Other venture partners for the smelter include Indonesian conglomerate Harita Group and Chinese nickel producer Lygend. The aluminum project has a projected production scope of up to 1.5 million mt/year of primary aluminum capacity, split into three phases of 500,000 mt/year.

The other project, the Xinfa Group Electrolytic Aluminum Project, a collaboration between Xinfa Group and Tsingshan Industrial is also expected to commission its first phase of 500,000mt/year before the end of 2025, according to market participants familiar with the project.

Market participants' near-term outlook for Asia remained bearish. Market participants said that premiums were unlikely to see support given the increase in supply in the region amid the expected continued outflow of supply from the US into other markets, in addition to new volumes from Indonesia, alongside weak demand in Asia.

Although some market participants are expecting that the ongoing US-Canada trade negotiation would provide some relief for Canadian aluminum entering the US, other market participants were conservative, expecting limited changes to the tariffs on aluminum.

Port stocks at main Japanese ports at the end of May stood at 331,000 mt, up 3.34% month over month but down 6.50% year over year.

The Platts CIF Japan spot premium for 99.7% P1020/P1020A aluminum ingot was assessed at $80/mt plus London Metal Exchange cash, CIF Japan on June 26, unchanged day over day.

Platts specifications are for all quarterly settlements on a CIF main Japanese port basis, negotiated before the quarter between two unaffiliated counterparties, for P1020/P1020A 99.7% primary aluminum ingot, with payment in cash against documents, for volumes of 500 mt/month or more under annual frame contracts.