Japanese Q1 2026 aluminum premium rises 126% QOQ to $195/mt CIF Japan

The first-quarter premium for imported primary aluminum to Japan rose 126.74% quarter over quarter to $195/mt plus London Metal Exchange cash, CIF main Japanese ports, according to data from Platts, part of S&P Global Energy.

The Q1 MJP premium assessment was based on 10 trades reported until Jan. 16. All deals were concluded at $195/mt with a total minimum volume of 14,000 mt/month, plus LME cash CIF Japan, for seaborne P1020/P1020A ingot for loading over January to March.

Offers heard during the negotiations were in the range of $190-$225/mt CIF Japan, 120%-162% higher than the settled Q4 MJP level. The lowest offer reported for Q1 was at the beginning of negotiations at $190/mt CIF Japan on Dec. 3, after which offers began to rise amid tight supply.

Q1 MJP saw slow but stable Japanese demand, but quarterly premium offer levels rose due to high European and US Midwest premiums.

Platts assessed the Daily Aluminum Duty Unpaid IW Rotterdam Premium at $280-$305/mt Jan. 16, with a midpoint of $292.50/mt, stable day over day and $12.50/mt week over week.

The Platts US aluminum premium held to 99.55 cents/lb plus LME cash, delivered Midwest on Jan. 1, equivalent to around $2,194.70/mt, a record high and up 0.7 cents/lb from the previous assessment, amid renewed consumer interest and tightening near-term supply.

The rise in Japanese Q1 premiums was also attributed to the LME aluminum contango and the near-term wide intermonth spread during the negotiations, which allowed sellers to carry forward cargoes, limiting selling interest for Q1, according to multiple traders and producers. However, in the week to Jan. 16, the intermonth spread for January-February LME aluminum in backwardation could prompt additional selling interest, weighing spot aluminum premiums, the sources added.

On the demand side in Asia, particularly Japan, market participants concurred that domestic Japanese spot demand was expected to remain slow throughout Q1 as the Japanese fiscal year came to an end.

"This is usually the time when buyers try to draw down their inventory levels," said a Japanese trader.

Elsewhere in Asia, spot buying interest remained muted amid high LME aluminum prices and premiums. However, some market sources expect an increase in spot inquiries after the Q1 MJP negotiations conclude.

On Jan. 19, Platts assessed the CIF main Asian ports (MAP) spot P1020 aluminum premium at $160/mt plus London Metal Exchange cash, down $2/mt day over day.

On the supply side, Indonesia's greenfield Xinfa Group Electrolytic aluminum smelter project, a collaboration between Xinfa Group and Tsingshan Industrial, began operations in Q3 and is running at half of its first-phase planned capacity of 500,000mt/year, according to market participants. The ramp-up process of the remaining 250,000 mt/year of its first phase is expected to continue into 2026, they added.

Another project, the Kalimantan Aluminum Industry, majority owned by PT Alamtri Resources Indonesia, formerly known as PT Adaro Energy Indonesia, had also been commissioned in Q4 and is said to be operating at around 100,000 mt/year.

A third greenfield smelter project, with an initial capacity of 250,000 mt/year, was also said to be scheduled for commissioning in 2026. However, the exact timeline regarding the project remains unconfirmed, according to multiple traders and producers.

Despite the new smelter capacity expected from Indonesia, the near-term outlook for Asia remains mixed, according to the sources, with most remaining cautious amid supply uncertainty. Some sources anticipate supply delays from Indonesia, which may support LME aluminum prices and premiums in the near term.

Concurrently, the market is paying close attention to whether South32's Mozal Alcantara smelter would halt operations from March 2026 onwards, especially against the current backdrop of high LME aluminum prices.

The front-loading of metal ahead of the Carbon Border Adjustment Mechanism implementation in 2026 was expected to create a supply surplus in the European market, according to traders and producers. However, Mozal's production suspension is set to lead to greater competition for tons in Europe and Asia, the sources added.

Port stocks at the main Japanese ports at the end of December stood at 316,800 mt, up 1.51% month over month but down 2.10% year over year.

The Platts CIF Japan spot premium for 99.7% P1020/P1020A aluminum ingot was assessed at $160/mt plus London Metal Exchange cash, CIF Japan on Jan. 19, 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.