Japan has started spot aluminium trade for the new fiscal year 2007 in a mixed mood, trade sources said. The fiscal year for majority of businesses in Japan start in April.
Trade sources said inquiries for Good Western grade aluminium, to be sourced on a spot basis, are not usually active at this time of the year, only a few weeks after the end of the second quarter premium talks. Consumers should have enough supply in their hands. The buying interest is lacklustre amid London Metal Exchange cash aluminium trading high near $2,800/mt Wednesday.
Nevertheless, one Tokyo trader said he has heard a spot deal closed in March at $75/mt CIF Japan plus London Metal Exchange cash, involving less than 1,000 mt of the material. The premium for this spot deal is higher than $71-74/mt CIF basis plus LME cash, the level agreed for the second quarter. A producer was contacted by Platts but the deal was not verified.
On the other hand, there were parties talking premiums lower than the Q2 premium levels. A second Japanese trader said one Western trader was offering levels close to $70/mt CIF.
A third trader commented that the mood is mixed, and the premiums tended to reflect the positions of the market participants rather than the demand and supply.
"If you go to a producer who had been offering $75/mt CIF for the second quarter, right after the Q2 premiums agreement, the producer would certainly offer you $75/mt again," the trader said.
Meanwhile, spot trade in the West has not been active. Some market players may offer lower premiums to achieve some sales in Japan, he added.
Platts assessed Japanese spot aluminium this week at $71-74/mt CIF Japan plus London Metal Exchange cash, unchanged from the previous week, on the back of an absence of a confirmed deal.
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