Japanese second-quarter aluminum premium rises to $125-$130/mt

Platts, part of S&P Global Commodity Insights, assessed second-quarter premium for imported primary aluminum at a range of $125-$130/mt plus London Metal Exchange cash, CIF main Japanese ports, on April 27, up 50% from $85/mt assessed in Q1 2023.

The rise in Q2 premiums indicates a turning point after the decline seen over the past five consecutive quarters.

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 Q2 assessment was on the basis of seven concluded settlements at $125/mt with a total volume of 15,000 mt/month reported done between March 31 and April 14, and seven concluded settlements at $130/mt with a total volume at a minimum of 5,000 mt/month reported done between March 3 and April 25, plus LME cash CIF Japan for seaborne P1020/P1020A ingot for loading over April-June.

Out of the 16 deals reported to Platts, two were excluded from the Q2 assessment.

A settlement reported done at $120/mt on March 30, as part of the annual frame contract, was excluded from the Q2 assessment as the deal was deemed not repeatable by the close of negotiations, when the remaining trades reported settled in a $125-$130/mt range.

Another settlement reported done at $130/mt on April 21, as part of the annual frame contract, was excluded as it did not fulfill Platts minimum volume requirement of 500 mt/month.

The total volume of the two reported settlements that were excluded amounted to 1,250 mt/month.

Despite the lackluster demand for aluminum in Japan, the higher premiums seen in Q2 were largely attributed to elevated premiums observed in the US and Europe.

In addition, market sentiment in Japan showed slight improvements as participants said that with the beginning of the new financial year in Japan from April 1, demand for aluminum is likely to witness an uptick in the upcoming quarter.

Meanwhile, Platts assessed CIF Japan spot premium for 99.7% P1020/P1020A aluminum ingot at $77-$87/mt plus London Metal Exchange cash, CIF Japan, on April 27, up $1/mt from April 26.