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Japan trade in imported spot aluminum holds steady on month in August

Wednesday, Sep 06, 2017

Japan trade in imported spot aluminum was stable month on month in August despite a seasonal slowdown in consumer activity, S&P Global Platts data showed.

Over 4,000 mt of 99.7% P1020/P1020A spot aluminum metal traded on a CIF main Japanese port basis in August, in seven transactions, Platts data showed.

This amounted to 6,000 mt including metal stored in LME warehouses. Platts does not take into account LME warrants as well as metal of Indian, Iranian and Egyptian origin in its assessment, however.

A total of 4,200-4,500 mt of spot aluminum metal traded on a CIF Japan basis in July, in seven transactions. No trade in LME warrant or Indian, Iranian or Egyptian metal was reported.

In August last year, the reported trade volume was 1,200 mt.

Although the traded volume was steady in August from July, the number of active market participants nearly halved as Japanese manufacturers closed for a week-long summer holidays starting in the second week of the month.

Some sellers said a handful of potential buyers, notably traders who had reduced their contract purchases, decided to stay on the sidelines as they wanted to keep their stocks low. Japanese aluminum consumption typically falls after the third quarter due to lower demand for beverage cans and air conditioners.

Buyers were cautious also due to the movement in the LME spread, sources said. Cash September contracts were in backwardation and some traders said the contango was not wide enough.

Most transactions in August were for 500 mt cargoes as a result.

Spot transactions in August were in the range of $73.50-$86/mt plus LME cash, CIF Japan.

Suppliers said lack of inquiries in the first three weeks of the month put downward pressure on the premiums.

But in the fourth week, consumers returned from holidays and began seeking October.

The CIF Japan spot premium was assessed at $78-$90/mt plus LME cash CIF Japan on August 1, $73-$75/mt CIF Japan on August 22, and $85-$87/mt CIF Japan on August 31.

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