Japanese Q4 aluminum premiums rise to $190-$220/mt

S&P Global Platts assessed the fourth-quarter premium for imported primary aluminum at $190-$220/mt plus London Metal Exchange cash, CIF main Japanese ports, on Oct. 1, up 10.8% from $185/mt for Q3.

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 Q4 assessment was on the basis of four concluded settlements at $190/mt with a total volume of 4,500 mt/month, seven concluded settlements at $215/mt with a total volume at a minimum of 4,500 mt/month, one concluded settlement at $217.50/mt with the volume of a minimum of 500 mt/month, and lastly three concluded settlements at $220/mt with a total volume of minimum 1,500 mt/month, plus LME cash CIF Japan for seaborne P1020/P1020A ingot for loading over October to November, concluded between Sept. 6-Oct. 1.

Out of the 18 deals reported to Platts, two were excluded from the Q4 assessment. Two of the settlements were concluded at $185/mt and $170, on Aug. 26 and Sept. 30 respectively, but were deemed not repeatable by the close of negotiations, when the remaining trades reported settled in a $190-$220/mt range.

The stronger Q4 premium compared with Q3 was attributed to the opening of the Chinese import arbitrage window. With the ongoing power supply crunch seen in China, smelters across the country were facing production cuts. According to various market participants, the opening of the Chinese import arbitrage window during the four weeks of the Q4 negotiations had exerted upward pressure on Japanese premiums.

Meanwhile, Platts assessed the spot Japanese import premium at $175-$185/mt plus London Metal Exchange cash, CIF Japan, on Oct. 1, up $2/mt from Sept. 30.