Japan Primary Al Premium to Drop to US$ 112-114/t in Jan-Mar

Japanese primary aluminium buyers are concluding the premium negotiation with offshore smelters at ranging US$ 112-114 per tonne for January-March shipment, which is around US$ 4 lower than US$ 116-118 in October-December. The price range is higher than expected by the buyers due to the suppliers’ aggressive stance.

The premium was expected to decrease for January-March from October-December due to uncertain demand condition. However, the concluding price is higher than expected level, which was as low as less than US$ 110 per tonne.

Japanese port aluminium inventory decreased by 15,800 tonnes to 210,000 tonnes at end of November from October end. However, the supply condition is far from tight, which is expected to lead major drop for the quarterly premium. However, the Japanese buyers cannot win the major drop when the demand increases in Southeast Asia.

Japanese buyers expect the premium could decrease to less than US$ 100 per tonne in 2011 due to higher supply capacity. The premium has kept high level at US$ 125-130 in January-March 2010, US$ 122-125 in April-June and US$ 120 in July-September.