China's import premiums for Good Western aluminium firmed further Wednesday to $230-240/mt CIF China plus LME cash, up from $195-205/mt a week ago, and also up from $170-180/mt in late May.
Market participants continued to cite stronger premiums in Japan and South Korea as the main supporting factor.
"The premiums are about the same now for China and Japan, there's no need for sellers to lower premiums for China if they can sell at that level to Japan and Korea," a China-based trader said. "Premiums is not the issue for China, the total amount, plus LME price, is important. If LME is back to the $1,800s, they will probably pay $250/mt premiums," he added.
Chinese buyers agreed that premiums have risen on stronger levels to Japan and Korea.
"We are not importing now as prices have narrowed between LME and domestic, and premiums are high. We've also heard offers at $250/mt this week, and we know deals to China were done last week at $220-230/mt, but nothing has been reported this week and we definitely won't pay anything above $240/mt," a Chinese consumer source said. "Below $240/mt, we can't say, it all depends on how the prices in the two markets move next.
The LME 3-months aluminium price was moving around $1,978/mt late afternoon Asian time. The front month July aluminium contract on the Shanghai Futures Exchange closed at Yuan 15,735/mt Wednesday.
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