
According to a Reuters report, one Japanese aluminium buyer has agreed to pay a global aluminium producer a premium of US$97 per tonne over the LME benchmark price for Q4 shipments (October to December), down 10% from Q3. This was confirmed by a source directly involved in price negotiations. It was reported that the aluminium producer had offered Japanese buyers a premium of US$110 per tonne for primary metal shipments for Q4.

Buyers were negotiating for a lower premium considering abundant aluminium supply and falling demand in China.
“We will ask for lower premiums, like between US$90 and US$100 per tonne, as there are abundant supplies and demand is softening in China and the rest of Asia, including Japan amid a slower economy,” a source at a trading house said after the offer.
For July-September quarter, Japanese buyers had agreed to pay a premium of $108 per tonne, up 3 per cent from the previous quarter. The current premium marks a first quarterly drop in the three quarters of 2019.
Another industry source said he heard about the deal, but others have not followed it as most of buyers are asking for lower levels.
Japan is Asia’s biggest importer of aluminium and the premiums it agrees to pay each quarter for the physical delivery of primary metal over the benchmark London Metal Exchange (LME) cash price set the benchmark for the region.
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