SINGAPORE -(Dow Jones)- Japan aluminum premium negotiations for the first quarter of 2010 have seen some contracts settle in the $125-$130 a metric ton range over the cash London Metal Exchange price, although at least one major producer is holding out for premiums above the $130 level, said traders Thursday.
"It's quite a confusing situation. It should have been decided by now, but it looks like the $130 level is pivotal," said a manager at an aluminum trading house in Tokyo.
A trader at a major diversified Japanese trading house also said that some negotiations were ongoing.
"One producer is holding out for more than $130, but consumers don't want to accept that," he said.
The premiums agreed on so far represent around a 9% increase over fourth quarter of 2009 settlements, which were at $115 to $120.
Japanese premiums for good western brand aluminum, which are set on a quarterly basis, have been traditionally regarded as a benchmark for major industrial consumers in the Asian region.
Spot premiums in Japan are around $130, indicating there's little metal available for immediate delivery, while Japan port inventories remain close to historic lows.
Aluminum stocks totaled 180,500 tons at the end of November, up 5.4% from October, reflecting some imports by traders keen to supply Japan's spot market.
At 0730 GMT,
LME three-month aluminum was at $2,254/ton, down $26 since Wednesday's kerb but up 10% since the start of December.
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