Japan's spot premiums for Good Western grade primary aluminium ingot have edged down to $70-74/mt CIF Japan, from the previous $71-74/mt CIF Japan, according to Platts' assessments.
A Japanese consumer has sourced more than 500 mt of the metal, sources close to the consumer and the producer said. The consumer would be paying premiums in a range of $70-74/mt plus London Metal Exchange cash prices. The spot deal was concluded several weeks ago.
The consumer also sources the material on a quarterly contract basis but has decided to purchase on the spot basis as the metal demand for summer products -- namely beverage cans and air conditioner components -- has risen in April.
The consumer added that although his company is consuming more metal than the quarterly contract volume, the consumption level still falls behind the company's target level.
Other traders and market participants said they saw the spot premiums steady at $71-74/mt CIF Japan in the absence of other spot deals. Most consumers are hesitant to purchase amid London Metal Exchange cash aluminium prices holding above $2,800/mt. When in need of the metal, they buy from the domestic spot market, or push forward their purchase plans months ahead,
rather than importing additional tonnage, they said.
Regarding the premiums for the third quarter, they are seeing lower than $71/mt CIF. The Alcoa's bid to takeover Alcan would have limited impact on the third quarter premium talks as Alcan ships limited Good Western ingot to Japan, sources said.
The Q3 premium talks are expected to start at the end of May.
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