Platts CIF Japan Q1 aluminum premium down 13.7% from Q4

S&P Global Platts assessed the first-quarter premium for imported primary aluminum at $177/mt plus London Metal Exchange cash, CIF main Japanese ports, on Jan. 6, down 13.7% from the midpoint of $190-$220/mt for Q4.

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.

The Q1 assessment was on the basis of 15 concluded settlements at $177/mt plus LME cash CIF Japan for seaborne P1020/P1020A ingot for loading over January to March, concluded between Dec. 27 and Jan. 6. The total volume of the 15 reported deals amounted to a minimum of 18,500 mt/month.

There were also eight settlements reported done at $160/mt between Dec. 3-16. These trades were not deemed repeatable by the close of negotiations, where the remaining trades that were reported towards the end of the quarter were all settled at $177/mt. The total volume of the eight trades reported summed up to a minimum of 8,000 mt/month.

The lower Q1 premium was largely attributed to the slowdown in aluminum demand in Japan due to falling consumption from major downstream users in Japan. In addition, market sources have also noted that the Chinese import arbitrage window that had reportedly been closed since October could have contributed to the softer premiums in Q1. According to various market participants, Japanese premiums fell in Q4 partly due to the fact that it was not supported due to the lower Chinese aluminum demand.

Meanwhile, Platts assessed the spot Japanese import premium unchanged at $136-$146/mt plus London Metal Exchange cash, CIF Japan, on Jan. 6 amid slow market activity and low spot aluminum demand.

A spot trade was reported after the Platts Market on Close assessment process Jan. 6 at $135/mt CIF Japan for a volume of 500 mt for February loading and February QP. The trade was reported by an international trader.