Japan's spot aluminium trade muted as LME prices slide

Tokyo (Platts)--22Oct2008 Japan's spot aluminium trade stayed muted this week as local tradersanticipated London Metal Exchange three-months contract prices would fallbelow $2,000/mt this week, market sources said Wednesday. Previously when prices turned down, consumers called traders to fixprices of next aluminium deliveries. "The difference is now, there is nobuying interest. Consumers want to cancel, or reduce purchase volumes," a Tokyo trader said. Slowing demand is indicated by port stocks at the country's three majorinternational ports that stood at 254,200-255,600 mt at the end of September. Stocks were up 10,000 mt from last month. The 10,000 mt rise in stocks is notunusual but in the current environment when consumption is falling in allsectors, 10,000 mt feels heavier than before, traders said. "This is special because we are trying to do business without thinkingabout prices. We want to find buyers first, think about prices later," saidone Tokyo trader. Before the banking crisis hit the Western countries, Japan was consumingaround 200,000 mt of primary aluminium monthly. The September aluminiumconsumption data is to be released from Japan Aluminium Association early nextweek. Overseas traders as well as Western producers who likewise have excesssupply may want to export to Japan before LME contract prices plunge below$2,000/mt, but Japanese traders said they received no firm offers. "The LME stocks are going up and I believe this is where the extra metalsupply is going," one west Japan trader said. Asked by Platts their spot premium ideas, traders said $65-70/mt plus LMEcash CIF Japan. There was also unconfirmed market talk that a Japanese traderhad bid $65/mt plus LME cash CIF to a producer but was turned down, as well asa deal was concluded at $70/mt plus LME cash CIF. In absence of deals, firm offers or bids, Platts assessed Japan importpremiums at $69-72/mt plus LME cash CIF, unchanged from the previous week.