Slumping demand cuts Q2 Japan aluminium premiums

Japan aluminium Q2 premium cut to $57-58 vs $58-62 in Q1 * Premiums at three-year low amid car industry slump * Japan aluminium shipments at 26-yr low, stocks 10-yr high By Miho Yoshikawa TOKYO, March 16 (Reuters) - Term premiums for primary aluminium ingot shipments to Japan for April-June have been cut to a three-year low of $57-$58 a tonne at some key firms, traders said, as a deepening recession slashes demand. The fall in premiums, from $58-$62 in the first quarter, follows a global slump in demand for cars, with Japan's huge car sector a key user of the metal along with packaging. The premiums are the lowest since $56 seen in the first quarter of 2006, as stocks at Japanese ports hit 10-year highs and shipments of aluminium products hit 26-year lows. "We've settled about half of our purchases at around $57-$58," one official directly involved in the negotiations said. He declined to be identified because of the sensitive nature of the negotiations. Aluminium term talks are held between the suppliers, which include mining giants such as BHP Billiton and Alcoa Inc , and Japanese buyers such as trading houses and aluminium mills. Japan, which must import virtually all the metal it needs, buys about 2 million tonnes of primary aluminium every year. As a sign of sluggish demand, February figures for aluminium stocks at key Japanese ports inched up another notch to remain pegged at a 10-year high. [ID:nT79453] An official at Marubeni Corp <8002.T> which tracks the stocks, said he expects the figures to come down shortly, reflecting moves by Japanese firms to curb imports of the metal. Japan's shipments of aluminium products fell nearly a third in January from a year earlier, their biggest fall in 28 years and taking them to a 26-year low as the global economy deteriorated. [ID:nT198708] Figures for February will be issued later this month.