London 15/02/2016 - Stocks of aluminium at major Japanese ports (MJP) dropped to their lowest in 14 months in January to 368,100 tonnes, according to data from trading house Marubeni Corp.
Aluminium stocks in the ports of Yokohama, Nagoya and Osaka dropped a combined 6.5 percent from December's 13-month low of 393,600 tonnes and 18 percent (25,500 tonnes) from the 449,800 tonnes held in January 2015.
January's figure also represents a continuation of the trend in place since mid-2015, with stocks in the country's major ports falling steadily from all-time highs hit in May above 500,000 tonnes.
The main movement in January was in Yokohama, where stocks dropped 17,500 tonnes to 203,400 tonnes, while stocks in Nagoya dropped 8,000 tonnes to 149,700 tonnes. Osaka inventories remained stable at 15,000 tonnes.
December's figure was the first time since November 2014 that port stocks have dipped below the 400,000-tonne mark. Japan is one of the world's largest consumers of aluminium, meeting its 1.7 million tonnes of annual consumption almost exclusively via imports.
Aluminium ingot premiums for delivery in the first quarter of 2016 settled at $110 per tonne cost, insurance and freight (CIF) MJP over LME prices, a 22-percent increase on the previous quarter.
Many traders have cited the consistent drop in port stocks as one reason for the rise in the premium. Second-quarter negotiations are set to take place from February 22.
Spot premiums for aluminium in Japan have proved resilient at $110-120 per tonne CIF MJP in recent weeks.
The US has been steady as well but in Europe duty-unpaid and paid premiums continue to fall amid tighter spreads, which have cut off cash-and-carry stock financing demand.
(Editing by Mark Shaw)