Aluminum buyers in Japan agreed to pay producers higher premiums for shipments starting in April, the first increase in three quarters, as the nation’s recovery from natural disasters boosts demand from builders and carmakers.
Premiums for the three months beginning April were set at $115 to $117 a metric ton over the London Metal Exchange cash price in transactions agreed so far, compared with $112 to $113 this quarter, said three officials involved in the negotiations. They declined to be identified because the talks were private.
Fees will increase after the economy in Asia’s largest aluminum importer returns to growth this quarter as a result of rebuilding from last year’s earthquake and tsunami. Supply declined after smelters reduced output on rising production costs and low metal prices.
Aluminum buyers in Japan pay a premium in addition to the LME cash price to cover freight and insurance and to reflect regional supply and demand.
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