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Japan Q4 aluminum talks stall after some settlements at $95/mt plus LME, CIF

Tuesday, Sep 26, 2017

  Japan's fourth-quarter aluminum premium negotiations have stalled since the first settlements at $95/mt plus London Metal Exchange cash, CIF Japan, last week, sources said on Monday.

S&P Global Platts reported that a producer and several Japanese buyers have agreed to set the Q4 contract premium for P1020/P1020A aluminum ingot at $95/mt plus LME cash CIF Japan, down from $118-$119/mt CIF Japan for Q3.

Talks have stalled as two out of five producers who regularly participate in the negotiations have not placed Q4 offers yet, said two Japanese traders.

Two producers have offered $100/mt CIF Japan, one at $110/mt CIF Japan, while two producers have not offered, they added.

A source involved the negotiations said as some consumers have been able to buy on a spot basis at less than $90/mt CIF Japan recently, they don't want to accept the $100/mt CIF Japan offer and also see $95/mt CIF Japan as too high.

But sellers have the advantage in the current Q4 talks and they are able to wait as LME warrant cancellations have increased, suggesting possible upturn in the physical market premiums.

The rise in the US and the European spot premiums show there are more upside than downside possibilities for the Japanese premiums in the next three months, said another source in the talks.

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