DJ Japan 2Q Aluminum Premiums Lower; Re-Exports To China-Traders

　　SYDNEY, Mar 17, 2009 (Dow Jones Commodities News via Comtex) -- Japanese aluminum term premiums for the second quarter of this year settled at $57-$58 a metric ton at some major firms, down from $57-$63/ton in the earlier three months, according to traders in the north Asian nation. 　　This reduction follows a drop from $75-$77/ton in the fourth quarter, and comes as a result of the global slump in demand for cars, a key consumer of the metal in Japan, alongside packaging. 　　Some producers were still holding out for higher premiums, and some consumers have decided to stay away altogether because of a lack of demand for their products, one trader said. 　　"Most people don't want to buy large quantities for the second quarter, and some feel they don't need to have a contract and prefer to buy in the spot market," the trader said. 　　Japan, particularly its car industry, is a key consumer of aluminum, and the slump in global auto demand has slashed consumption of the metal. 　　Still, the rise in buying from China has prevented stocks at Japanese ports from surging. Higher premiums for aluminum on the Shanghai Futures Exchange than the London Metal Exchange has prompted re-exports of aluminum ingot from Japan to China. 　　Recent purchases of the metal by the China's State Reserve Bureau for government stockpiles has helped push up SHFE prices. 　　As a result of re-exports, aluminum stocks in Japanese ports rose only 3.1% to 374,600 tons in February - still a ten-year high - following a 15% rise in the previous month. 　　The demand from China as well as South Korea has pushed up spot premiums for aluminum imports into China to above $100/ton on cost, insurance and freight basis. 　　Earlier this month, Asia spot premiums stood at around $70/ton. 　　"Chinese traders are only targeting nearby shipments for March/April. They want to take advantage of the arbitrage, and there're no indication of current levels of demand," a trader said, who believed at least 100,000 tons have been imported into China so far this month.