Per buyer sources who spoke to industrial media late last week, a few Japanese aluminium customers are still negotiating fourth quarter aluminum premium for billet, slab, and foundry alloys. However, negotiations for standard ingot billets have concluded, they revealed.
S&P Global Platts reported that sources informed them on Thursday that certain producers have come to terms with aluminium rolling mills and extruders for quarterly premiums of US$103/mt plus London Metal Exchange cash, CIF Japan, which is a 22-percent drop from last quarter’s price of US$132/mt CIF Japan. Standard P1020/P1020A ingot contracted for the same price in Q4 as well.
Certain unnamed consumers told the media outlet that contracts with two producers still await settling, with a bid/ask level of US$103 to US$109/mt CIF.
According to S&P Global Platts, Q4 premiums rested at US$103/mt plus LME cash, CIF Japan, also off by 22 percent from the prior quarter. Contracts were made on 10 settlements totaling at least 8,000-10,000 mt/month.
The price drop comes after Japanese warehouses experienced significant supplies this summer. In July, Japanese trading houses recorded a total inventory of 310,400 metric tons, which was a rise of 1.1 percent over the prior month’s total inventory on hand of 306,900 metric tons. The total is the highest ever since exactly two years ago, when that month saw an inventory total of 305,900 metric tons.
Unnamed sources who spoke to industry media chalk up the highs to the Trump tariffs on aluminium and the harsh sanctions levied on Russian aluminium titan U.C. Rusal in the spring. In addition, Japan has suffered domestic demand struggles in recent months, especially in the beverage can sector. Though beer consumption is down slightly, polyethylene terephthalate (PET) is making inroads in some breweries, slicing down aluminium’s market share. Additionally, demand for aluminium sheet in the production of coffee beverage containers is also retreating.