Home > News > Japan

Japan's domestic aluminium premiums mixed amid LME backwardation

Wednesday, Oct 25, 2006
点击:

Japanese domestic aluminium premium levels were mixed this week amid the backwardation in the London Metal Exchange cash-to-three months spread,sources said.

The LME cash-to-three months aluminium spread slipping into backwardation in some instances this month has forced some Japanese trading houses to offer reduced premiums to domestic consumers to sell away excess inventories, while some traders closed deals at higher levels.
    
One trader quoted the domestic premiums for Good Western grade aluminium ingots at $75-80/mt plus LME prices for domestic spot sales this week.

Japanese traders import the ingots from Australia, South Africa and other origins at $82-84/mt plus LME cash CIF Japan. The $82-84/mt are the premiums added onto the LME prices for the shipments in the fourth quarter of 2006.

They generally sell to domestic consumers with surcharges added onto the quarterly import premiums. In September, for example, the domestic premiums were talked at $85-90/mt plus LME prices, higher than the Q4 import premiums.
    
Two traders told Platts earlier that they have seen domestic spot businesses concluded at around $80/mt.

On the other hand, a fourth trader said he has concluded spot domestic deals at $95/mt plus LME prices and believed a deal was possible at $100/mt.

Traders who saw softer domestic premiums said in addition to the LME backwardation impact, there is pressure from the stronger US dollar and the higher LME aluminium prices. The currencies at Yen 119-120 to the dollar and the LME cash aluminium trading above $2,600/mt cooled buying interest, urging some traders to reduce the premiums.

The trader who saw domestic premiums as firm as $100/mt said material supply was tight on the back of falling port stocks. Japan's stocks of aluminium stored in three major international ports in the country totaled 225,000-226,300 mt at the end of September 2006, down by 10% from August,according to data of trading houses in Japan.
   
While the domestic aluminium market finds no solid direction on the back of slow buying interest and tight supply, traders said there were little talks of importing materials on a spot basis this month. One trader said he was in tough competition to close sales and eventually reduce stocks.

Recommended exhibitions

16TH ARAB INTERNATIONAL ALUMINIUM CONFERENCE
  ARABAL, which is being organized and hosted by Qatalum, is the premier trade event for the Middle East's aluminium i......
Aluminium 2012
  ALUMINIUM is the leading B2B platform in the world for the aluminium industry and its main applications. This is whe......
The 4th edition of Zak Aluminum Extrusions Expo
 Date

  14th - 16th December 2012

  Venue

  Pragati Maidan,

  New Delhi,India.

  Exhibition Timings

 ......
ALUMINIUM DUBAI 2011
Name:ALUMINIUM DUBAI 2011
Time:2011-5-9 to 2011-5-11
Place:Dubai International Convention & Exhibition Centre, Dubai, UAE......