Global Aluminum Maker Daiko Raises Premium Offers For Japanese Buyers For 2Q Aluminum
Apr 25, 2023
Global Aluminum Maker Daiko Raises Premium Offers for Japanese Buyers for 2Q Aluminum
Sources involved in quarterly pricing negotiations said that global aluminum producers offered Japanese buyers a premium of $125-145/ton for primary aluminum in the second quarter (April-June), compared with the current quarter. Up 45%-71%.
If buyers agree, it would mark the first rise in aluminum premiums in six quarters and hit the highest level since the final quarter of 2022, suggesting aluminum producers believe demand from automakers will pick up.
Japan is the largest aluminum importer in Asia. The premiums for primary aluminum on the London Metal Exchange (LME) aluminum spot contract are negotiated with global producers every quarter, and these premiums also become the benchmark quotations in the Asian region.
Last week, Japanese buyers began quarterly pricing negotiations with global aluminum ingot suppliers, including Rio Tinto and South32, which are expected to continue until later this month.
In the first quarter of 2023, Japanese buyers agreed to pay a premium of $85-86 per ton, down 13 to 14 percentage points from the fourth quarter of 2022. A source at a global aluminum supplier said the company is looking to raise premiums as premiums are rising in the U.S., Europe and elsewhere in Asia, citing solid aluminum demand and tight supply, as well as expectations of a revival in auto production.
But most buyers don't find those reasons convincing. A source at a Japanese aluminum rolling mill said domestic demand remained weak and his company was alarmed by the sharp rise in premiums.
According to data from Marubeni Corporation, at the end of January, the aluminum inventories of Japan's three major ports reached 392,500 tons, an increase of 2.8% month-on-month and a year-on-year increase of 34%, indicating weak demand for aluminum.
Shanghai Mengjiang has over 16 years' experience in producing aluminum foil. Welcome to contact us if you need it.
