Japanese Q4 aluminum premium decreases 20% to $86/mt CIF Japan

Platts, part of S&P Global Energy, assessed the fourth-quarter premium for imported primary aluminum to Japan at $86/mt plus London Metal Exchange cash, CIF main Japanese ports, on Oct. 22, down 20.4% from $108/mt for the third quarter of 2025.

The fourth quarter MJP premium assessment was based on nine reported trades on Oct. 21. All deals were concluded at $86/mt with a total minimum volume of 13,500 mt/month, plus LME cash CIF Japan, for seaborne P1020/P1020A ingot for loading over October to December.

Offers heard during the negotiations ranged between $92-$103/mt CIF Japan, 5%-15% lower than the settled Q3 MJP level at $108/mt. The lowest offer level reported for Q4 was 7% higher than the concluded Q4 MJP level at $86/mt.

Buying interest for Q4 MJP was weak, with significantly lower spot MJP premium levels observed amid weak demand in Japan. However, buyer expectations soon after were heard in the $80s/mt range.

Throughout the Q4 MJP negotiations, Platts CIF main Japanese ports spot premium for 99.7% P1020/1020A aluminum ranged between $60-$62/mt plus LME cash, 30%-35% lower than the concluded Q4 MJP level at $86/mt.

On the demand side, market participants said that domestic Japanese demand from the building and construction sector, as well as the automotive sector, has remained weak. Demand from the automotive sector had earlier been impacted by the US’ 25% automotive tariffs effective April 2, which were later reduced to 15% effective Sept. 16 for Japan, among other countries.

Some market participants voiced expectations of a slight improvement in demand in the coming months following the reduction in tariffs.

On Oct. 22, Platts assessed the CIF main Asian ports (MAP) spot P1020 aluminum premium steady on the day at $62/mt plus London Metal Exchange cash, up $6/mt from the start of the quarter but down $143/mt from the start of 2025 and.

On the supply side, an Indonesian greenfield aluminum smelter project, the Xinfa Group Electrolytic Aluminum Project, a collaboration between Xinfa Group and Tsingshan Industrial, began operations in Q3 and is currently running at half of its first phase planned capacity of 500,000 mt/year, according to market participants. The ramp-up process of the remaining 250,000 mt/year of its first phase is expected to continue through Q4 and into 2026, they added.

Another project, the PT Kalimantan Aluminum Industry , or KAI, majority owned by PT Alamtri Resources Indonesia, formerly known as PT Adaro Energy Indonesia, is expected to commission its first phase of production by the end of 2025. However, some market participants said they expected volumes from the first phase of the project to only be available on the market by Q2 2026. 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.

Market participants' near-term outlook for Asia remains mixed. Some market participants said they expected to see some support for premiums in Asia amid expectations that South32’s Mozal Alcantara smelter would be placed on care and maintenance in 2026, having failed to secure an affordable power agreement for the plant. According to market participants, this may lead to an outflow of metal tons from Asia to Europe to replace Mozal volumes in Europe.

In contrast, others in the market remain bearish due to the current high port stock levels in Asia and slow demand. They said that the support for Asian premiums that stems from the current uptrend in Rotterdam premiums would be short-lived amid expectations of continued slow European demand in 2026. Rotterdam premiums saw an uplift amid low inventory levels in Q3 and front-loading of metal ahead of the Carbon Border Adjustment Mechanism (CBAM) starting in 2026. The current front-loading of metal may create a supply surplus in the European market if demand does not match up, and may lead to eroding premiums, according to some market participants.

Meanwhile, the increase in US aluminum tariffs from 25% to 50% effective June 4 has reduced interest in exporting to the US, leading to declining inventory levels. Platts assessed the spot US Aluminum Midwest Premium at 84 cents/lb plus LME cash, delivered Midwest, on Oct. 21. Market feedback suggested that replacement costs for cargoes headed to the US would be around 80-82 cents/lb plus LME cash, considering the 50% tariffs and higher LME aluminum prices.

Port stocks at main Japanese ports at the end of September stood at 341,300 mt, up 1.8% month over month and 9% year over year.

The Platts CIF Japan spot premium for 99.7% P1020/P1020A aluminum ingot was assessed at $62/mt plus London Metal Exchange cash, CIF Japan on Oct. 22, 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.