24 NOVEMBER 2013Reuters
Rusal offers aluminium to Japanese buyers at a premium of $270
Edited by : AL CIRCLE
2 min read
Russia's United Company Rusal Plc , the world's biggest aluminium producer, said it had offered January-March shipments of the metal to Japanese buyers at a premium of $270 per tonne, seeking a record high.
Japan is Asia's biggest importer of aluminium, and the premiums that it agrees to pay each quarter over the London Metal Exchange cash price set the benchmark for the region.
"The reason why we are seeking an increase for the first quarter is because we expect tight supply in Asia and healthy demand in Southeast Asia, Japan, and Taiwan," Geoff Watson, director for Asian sales at Rusal marketing, told Reuters in a telephone interview.
Recovery of spot premiums in Europe and the United States are also behind the higher offer, he said.
The new offer is about 10 percent higher than the premiums paid by Japanese firms in the October-December quarter at $245-247 per tonne PREM-ALUM-JP over the LME cash price.
A Japanese buyer said his company wants to see a decline in the premium in the January-March quarter as Japanese firms did not get much benefit in the previous quarter from a fall in premiums in Europe and the United States.
The record for premiums so far was the fourth quarter of 2012 at $254-$255 a tonne due largely to supply constraints as industrial consumers competed with investment demand for the aluminium, while bottlenecks at warehouses monitored by the LME led to long queues for delivery.
The LME, the world's biggest industrial metals marketplace, announced a tougher warehouse policy on Nov. 7 to cut queues for delivery to a maximum of 50 days from over a year in some cases, after persistent complaints from metal buyers about the high premiums they had to pay.
But queues may take several years to dissipate, lending support to premiums.
The latest quarterly pricing negotiations are expected to begin next week between Japanese buyers and miners including Rusal, Rio Tinto Ltd , Alcoa Inc and BHP Billiton , and are expected to continue to next month.
"The letter has been sent to our Japanese customers. We will be talking to them in the next two weeks," Watson said.
Japan is Asia's biggest importer of aluminium, and the premiums that it agrees to pay each quarter over the London Metal Exchange cash price set the benchmark for the region.
"The reason why we are seeking an increase for the first quarter is because we expect tight supply in Asia and healthy demand in Southeast Asia, Japan, and Taiwan," Geoff Watson, director for Asian sales at Rusal marketing, told Reuters in a telephone interview.
Recovery of spot premiums in Europe and the United States are also behind the higher offer, he said.
The new offer is about 10 percent higher than the premiums paid by Japanese firms in the October-December quarter at $245-247 per tonne PREM-ALUM-JP over the LME cash price.
A Japanese buyer said his company wants to see a decline in the premium in the January-March quarter as Japanese firms did not get much benefit in the previous quarter from a fall in premiums in Europe and the United States.
The record for premiums so far was the fourth quarter of 2012 at $254-$255 a tonne due largely to supply constraints as industrial consumers competed with investment demand for the aluminium, while bottlenecks at warehouses monitored by the LME led to long queues for delivery.
The LME, the world's biggest industrial metals marketplace, announced a tougher warehouse policy on Nov. 7 to cut queues for delivery to a maximum of 50 days from over a year in some cases, after persistent complaints from metal buyers about the high premiums they had to pay.
But queues may take several years to dissipate, lending support to premiums.
The latest quarterly pricing negotiations are expected to begin next week between Japanese buyers and miners including Rusal, Rio Tinto Ltd , Alcoa Inc and BHP Billiton , and are expected to continue to next month.
"The letter has been sent to our Japanese customers. We will be talking to them in the next two weeks," Watson said.
Previous article
Metals market to play ‘decisive role’ in Chinese economy
Next articleAluminum fees in Japan seen near record in first quarter
Grow with
AL Circle
