CIF Japan Q2 aluminum premium rises to $148-149/mt

　　Platts specifications are for all quarterly settlements on a CIF main Japanese port basis, negotiated before the quarter between two unaffiliated counterparties, for P1020/P1020A 99.7% primary aluminum ingot, with payment in cash against documents, for volumes of 500 mt/month or more under annual frame contracts. The Q2 assessment was on the basis of 16 concluded settlements at $148/mt and at least five concluded settlements at $149/mt plus LME cash CIF Japan and for seaborne P1020/P1020A ingot for loading over January to March. An early Q2 settlement was concluded at $115/mt premium on Feb. 12, significantly ahead of the majority of other Q2 trades that were transacted within the month of March. Total volumes reported by the market amounted to a minimum of 11,500 mt/month.

　　Two deals reported closing at $148/mt and $149/mt respectively for fewer than 500 mt/month were excluded from the Q1 assessment as neither fulfilled Platts' minimum volume requirement of 500 mt/month. All deals reported are part of annual frame contracts. Deals were reported over Feb. 12 to March 29.

　　The stronger Q2 premium over that seen in Q1 was attributed by many in part to the opening of the Chinese import arbitrage window, a move that was catalyzed by reports of production cuts of around 100,000 mt by electrolytic aluminum enterprises in Eastern Inner Mongolia and the Inner Mongolia Autonomous Region's decision to cancel preferential electricity prices to energy-intensive industries including the primary aluminum sector earlier in February, said market participants.

　　Despite the sudden closure of the Chinese import arbitrage window in the last week on the back of market speculation of China's State Reserve Bureau's potential releasing of 100,000-800,000 mt of aluminum stock into the market, Q2 reported trade premiums nonetheless remained tightly range-bound between $148-149/mt levels.

　　Meanwhile, Platts assessed the spot Japanese import premium unchanged at $142-$152/mt plus London Metal Exchange cash, CIF Japan, on March 29 on tight supply and shipping conditions amid higher regional spot premiums.