Several Japanese aluminium buyers have reached an agreement to pay a premium of $108 per metric ton for shipments scheduled from July to September. This figure represents a notable decline of 41% from the current quarter, largely due to weak demand and excess supply, according to multiple sources involved in the negotiations. The agreed premium is significantly lower than the $182 per ton paid for the previous quarter, marking the second consecutive decline and the lowest premium since the January-March quarter in 2024.
Initial offers from global producers ranged from $122 to $145 per ton. Japan stands as a key importer of aluminium in Asia, and the premiums paid for the primary metal shipments serve as a vital benchmark for the region. A source from a trading house noted that, despite concerns regarding the impact of U.S. tariffs, the actual effects have been limited thus far.
The sharp drop in the premium can be attributed to weak supply-demand dynamics. Moreover, aluminium stocks at three major Japanese ports have risen to 331,000 tons by the end of May, reflecting a 3.3% increase from the previous month, as reported by Marubeni Corp. A second source from an end-user indicated that, despite no significant changes in local demand, local spot prices have decreased during negotiations, plummeting to around $80. This drop has compelled producers to retract their initial offers.
The quarterly pricing discussions commenced in late May, involving Japanese buyers and global suppliers, including prominent companies such as Rio Tinto and South32. The sensitivity of the negotiations led sources to remain anonymous.