According to Platts assessment, a division of S&P Global, the premium for Japanese primary aluminium imports in the first quarter of 2025 stands at $228 per tonne over the London Metal Exchange cash price, reflecting a 30.29 per cent rise from $175 per tonne in Q4 2024.
Image source: Sumitomo Corporation
The main Japanese port aluminium premium has been assessed on the basis of 12 trades done between December 12, 2024, and January 22, 2025, involving a total trade volume of 15,000 tonnes per month.
The premium averaged in the first quarter of 2025 is the highest since the fourth quarter of 2021 compared to $205 per tonne. According to Platts, the contributing factor to this spike in Q1 premium is the limited availability of primary metal due to production cuts on high alumina prices, reaching a historic high on December 4 at $805 per tonne.
In addition to production cuts, China’s export tax rebate is also a reason for the high premium, driving inquiries to China before the rebate withdrawal comes into effect.
As of Wednesday, January 22, Platts found the CIF Japan spot premium for 99.7 per cent P1020/P1020A aluminium ingot was assessed at $2 to 5 over the LME cash price.
Platts assessment is based on the settlement for the Japanese aluminium shipment premium, which was negotiated before the quarter between two unaffiliated counterparties, for P1020/P1020A primary aluminium ingot, with payment in cash against documents for volumes of 500 tonnes per month or more under annual contracts.
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