Premium for aluminium shipments to Japanese buyers for Q2 decline by 1.2%
According to the latest Reuters update, the premium for aluminium shipments to Japanese buyers has been set at $82 per tonne for April to June. The premium is lower by 1.2 per cent from the last quarter, reported sources involved in market pricing.
Japan is the biggest importer of aluminium in Asia and the premiums it agrees to pay for primary aluminium shipments for each quarter over the cash price settled at the London Metal Exchange (LME) set the benchmark for the region.
During January-March quarter, the premiums for aluminium shipments were $83 per tonne. This marks the third consecutive quarterly drop. The premiums for Q2 2020 are also lower than the initial offers of $98-$105 made by producers.
“We have struck all deals at $82 a tonne by early this week,” a source at an aluminium fabricator said on Thursday.
“Our production has not been impacted by the pandemic yet, but we may need to cut output as demand for automobiles and home electrical appliances looks fairly bleak,” he said.
“All Q2 deals were done at $82 a tonne which was below our initial offer,” a source at a producer said on Wednesday.
“We had to compromise as expectations for demand fallout have grown among buyers since the coronavirus has spread so rapidly outside of China in March,” he said.
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