Japan Primary Al Premium Drops to US$ 112-113 for Jan-Mar

Japanese primary aluminium buyers concluded the premium negotiation with offshore smelters to reduce the premium by US$ 6-7 to US$ 112-113 per tonnes for January-March 2012 from October-December. The premium reflected lower demand at home and abroad and lower premium in Europe and USA. Some of Japanese buyers canceled the ingot purchase and some reduced the purchase volume in January-March.

Offshore smelters offered US$ 114-115 per tonne of premium at the beginning of the talk. Japanese buyers required the premium reduction to around US$ 110 level under slower demand and lower offshore premium. With recognition of the market situation, the smelters accepted the lower bid finally.

Japanese buyers’ purchase volume decreases for January-March. A trading firm source said some users required US$ 105 or US$ 90 per tonne of premium to show their intention for no purchase. The buyers expect the demand decreases in coming quarter despite of higher production by automobile industry. Japanese trading firms see appliances and other manufacturers would reduce the activity.

Thai flood results in ingot diversion from Thai plants to Japanese plants. The additional tonnage impacts on Japanese oversupply. A maker source said a spot tender by Japanese buyer hit less than US$ 100 per tonne of premium in December.