Platts
Rio Tinto Alcan offers a premium of $200/mt plus LME cash for aluminium export to Japan
Edited by : AL CIRCLE
2 min read
Negotiations for premiums for primary aluminum ingot to be exported to Japan in the third quarter have started, with Rio Tinto Alcan offering a premium of $200/mt plus London Metal Exchange cash CIF Japan, sources said Monday.
A representative from a second global producer, who will be meeting with Japanese buyers this week, has not yet made Q3 premium offers, two Japanese buyer sources said.
Six other overseas suppliers are expected to make their Q3 premium offers in the coming weeks, Japanese buyers added.
The negotiations are for 30,000-50,000 mt/month of primary aluminum ingot of minimum 99.7% aluminum and maximum 0.2% iron, 0.1% silicon content.
Some Japanese buyers started negotiations earlier in May to secure Q3 volumes amid mounting concern over tightening supply, Platts reported earlier.
There was talk in the market of two deals settling at $190-200/mt plus LME cash CIF Japan for 500 mt/month shipments over June-September, but this could not be immediately confirmed.
Two sources said they had heard of a spot deal done at $190/mt plus LME cash CIF earlier this month. Three other sources said another deal was heard done last week at $200/mt plus LME cash CIF Japan, with one adding that it was believed to be for two or more shipments over several months from June.
Platts was not immediately able to reach the companies named as directly involved in the deals.
One buyer source said the deals reached earlier in May were the result of some Japanese buyers wanting more shipments to arrive over May-June before possible power shortages emerge over July-September in the Osaka region. Kansai Electric Power Company, the power utility in Osaka, has not yet been able to restart its nuclear power plant.
But rolling mills and other aluminum end-users outside Osaka are not advancing their production schedules to avoid power shortages, sources added.
"The moves to produce ahead, to avoid power shortages, is limited to mills producing foils [in Osaka] that consume more power [than production of other rolled products]," one rolling mill source said.
"Most mills are keeping their output level unchanged," the source added. "For some mills, I hear aluminum products orders have been slower than their initial expectations since April."
A representative from a second global producer, who will be meeting with Japanese buyers this week, has not yet made Q3 premium offers, two Japanese buyer sources said.
Six other overseas suppliers are expected to make their Q3 premium offers in the coming weeks, Japanese buyers added.
The negotiations are for 30,000-50,000 mt/month of primary aluminum ingot of minimum 99.7% aluminum and maximum 0.2% iron, 0.1% silicon content.
Some Japanese buyers started negotiations earlier in May to secure Q3 volumes amid mounting concern over tightening supply, Platts reported earlier.
There was talk in the market of two deals settling at $190-200/mt plus LME cash CIF Japan for 500 mt/month shipments over June-September, but this could not be immediately confirmed.
Two sources said they had heard of a spot deal done at $190/mt plus LME cash CIF earlier this month. Three other sources said another deal was heard done last week at $200/mt plus LME cash CIF Japan, with one adding that it was believed to be for two or more shipments over several months from June.
Platts was not immediately able to reach the companies named as directly involved in the deals.
One buyer source said the deals reached earlier in May were the result of some Japanese buyers wanting more shipments to arrive over May-June before possible power shortages emerge over July-September in the Osaka region. Kansai Electric Power Company, the power utility in Osaka, has not yet been able to restart its nuclear power plant.
But rolling mills and other aluminum end-users outside Osaka are not advancing their production schedules to avoid power shortages, sources added.
"The moves to produce ahead, to avoid power shortages, is limited to mills producing foils [in Osaka] that consume more power [than production of other rolled products]," one rolling mill source said.
"Most mills are keeping their output level unchanged," the source added. "For some mills, I hear aluminum products orders have been slower than their initial expectations since April."
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