Japan Premium for Primary Aluminium Drops to US$ 71-73/t

Japanese buyers concluded the negotiation to decrease the primary aluminium ingot premium to US$ 71-73 per tonne CIF Japan for April-June shipment, which represented drops for 2 quarters in a row. Many of the premiums are US$ 72 and US$ 5 lower than January-March though some buyers agreed to pay US$ 74. The premium was adjusted in small range under balanced supply. The ingot suppliers offered flat premium while Japanese buyers sought major drop to less than US$ 70 per tonne for April-June shipment. The Japanese buyers urged major drop though backwardation between cash price and futures price at London Metal Exchange widened to more than US$ 100 per tonne. However, the drop was smaller when the backwardation narrowed and US premium keeps firm. Primary ingot buyers secure minimum materials for immediate use with expectation for lower price. Japanese premium could decrease for July-September depending on the supply balance.