Japan Trader Expects Primary Al Premium at US$ 50-70/t in 2009

Mitsui & Co., Japanese major trading house, forecasts overseas primary aluminium suppliers’ spot premium at the range of US$ 50-70 per tonne in 2009. The trader expects US$ 50-60 for April-June, US$ 55-65 for July-September and US$ 55-70 for October-December.

Offshore ingot producers will start operation of 2 new smelters in Middle East area this year. On the other hand, ingot demand is unlikely to recover in USA and Europe. Ingot suppliers would try to sustain their sales shares in Japanese market in 2009, Mitsui forecasts.

Meanwhile, the producers are likely to decrease their ingot output by total 3.228 million tonnes in 2009, 2.983 million tonnes of which comes from higher productive costs and lower ingot price while 245,000 tonnes from other factors such as accidents.

Mitsui forecasts primary aluminium production would be cut by 1.427 million tonnes in China and 1.801 million tonnes in other regions. Aluminium smelters are in the trend to decrease their outputs. However, the additional output reduction may not occur as long as primary aluminium price sustains the current level.