For the second consecutive quarter, the premium offered by Japan’s primary aluminium buyers has further depleted, said two sources directly involved in quarterly pricing talks. Mirroring a similar20 per cent decline as seen in the previous quarter, the proposed premium for Q3 2025 has reached USD 145 per tonne versus USD 182 per tonne.
This continued downturn marks not only the second straight quarterly decline within the year but also the second such drop in the past five years. After a strong start to the year, when the premium surged to USD 228 per tonne for the March quarter, representing a 30 per cent quarter-on-quarter increase, Japan’s aluminium premium has steadily weakened with each subsequent quarter.
When compared to the Q1 2025 premium, Japan’s outbound trade premium for Q3 reflects a sharp decline of 36 per cent. This consecutive drop raises a key question: what’s driving this continued downward trend?
Weaker ongoing demand could be attributed to the continued downfall in Japan’s premium, an additional charge paid to a seller/producer over the London Metal Exchange Benchmark price. The aluminium consumption in Japan and the rest of Asia was slightly bearish as affected by the United States’ 25 per cent tariffs on automotive imports effective April 2. The feeble market condition is further supported by Reuters’ report that Japan’s April industrial output fell 0.9 per cent M-o-M, the first decline in three months.
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