Trade activities for Japanese aluminum spot imports thin, focus on domestic trade

Trade activities for Japanese aluminum spot imports were thin Monday as Japanese market participants shifted their focus to domestic trade after having concluded their fourth-quarter contract premiums negotiations last week, sources said.

In the absence of spot deals, bids or offers reported from Japanese buyers and overseas sellers, Platts assessed the spot aluminum premium for imports into Japan Monday at $245-246/mt plus LME cash, CIF Japan, unchanged from Friday.

Japanese traders said they were expecting end-users to ask for price reductions on the back of the Q4 import premiums settling lower at $245-246/mt plus LME cash CIF last week, down from $249-250/mt for Q3. This however, has yet to be seen because of a lack of inquiries.

So far, there were only a handful of deals heard for 100-500 mt lots for September-October delivery over the past week.

Some trade and consumer sources said sales in the Toyama prefecture were the most competitive in the country, due to high stocks.

"There is a possibility of Toyama losing its supplies from Indonesia if the Japanese-Indonesian Inalum joint-venture framework ends in October, which is why stocks are high," said one Japanese trader.

Of the 8,746 mt aluminum imports into the Fushiki Toyama port in August, 4,200 mt were from Indonesia, Japanese customs data released last week showed.

One end-user in the construction sector said in some cases, sales prices in Toyama were $5-10/mt lower than the other regions, but some traders said there were not enough businesses in Toyama to constitute a trend.

Japanese traders said domestic spot trade is expected to pick up from Tuesday as the new month starts. One automotive maker and one beverage can maker are expected to issue buy tenders later this week.

There is a possibility of more orders this week, if the LME contango spread between cash-to-three months widens to $47-50/mt, some added. The spread was at $44-45/mt Monday.

There are more buyers recently booking spot cargoes in the first week of the month for delivery within the month in view of the contango widening, traders said.