High Q1 aluminum premium could slow down Japanese demand

Reuters quoted Japanese industry officials as saying that domestic demand for the metal used in products from computers to planes is likely to be weak in the first few months of 2010, with some economists forecasting Japan will slide back into recession. A Japanese official said that "The outlook for demand in the Q1 is opaque and as many say there are fears that there might be a double dip. Immediate demand stemming from moves to build domestic stocks appears to have been completed for the time being." The official with the second end user said that "We are going to try to set our program so we will not be forced to make purchases we don't want." The first end user official said that he believed there was slightly less need to buy in January to March in 2010. He said that I think the situation we face is a touch less difficult than the situation we faced during talks for the Q4." Worries that UC RUSAL would not sell metal into Asia stoked fears of a shortage during talks for Q3 supplies and prompted Japanese buyers to accept a roughly 30% hike in premiums, have eased a little. Industry officials said that they have not heard whether the indebted Russian aluminium giant will take part in upcoming Q1 talks. (Sourced from Reuters)