Europe aluminium premium recorded high in February, a rise of 30 % from 2014 beginning, and have stayed at high levels of approximately $360 a tonne above cash aluminium price at LME.
Still, the prices are quite low in North America, where the aluminium premiums in Midwest rose to 20.5 cents per lb ($452/tonne) in the beginning of this year.
"Producers are saying that they need to raise the premiums as high as the other regions as physical metal supply is tight," according to three sources at aluminium users. "To offset weaker metal prices, producers need higher premiums. Otherwise, we can't afford to pay production costs," a producer source said.
But aluminium buyers were not ready to accept high premium prices.
"These offers are insane. Premiums in the Midwest are now falling, and aluminium inventories at Japanese ports show no tightness," a user source said.
North American premiums have fallen to about 19.5 cents/lb from recorded 20.5 cents/lb, a trader said.
Marubeni Corp, the trading house said, aluminium stocks at the three major Japanese ports in January end were 266,700 tonnes, which was 1.5% higher than it was in the previous month.
"Producers look committed to win higher premiums this time. I am afraid premiums paid in Japan will likely move higher until the LME metal price rebounds as producers intend to secure somewhere between $2,000-$2,200 (per tonne) in total," he said.
For January-March quarter, most Japanese buyers agreed to pay a premium of $255 per tonne, which was higher than 3% from prior quarter and also higher the price in 2012.
