A raft of new aluminium supply deals in Japan have been settled at $95 per tonne cif MJP for the first quarter next year, following the first such transaction at that level earlier on Thursday December 22.
Metal Bulletin reported what sources believed to be the first deal to be settled between a producer and a Japanese buyer during continuing negotiations earlier in the day, with the $95 premium representing a 27% increase on the fourth-quarter benchmark of $75 per tonne.
First-quarter deals for 5,000 tonnes, 7,000 tonnes and 1,000 tonnes have now all been reported to Metal Bulletin at $95 per tonne by Japanese buyers.
Though many buyers had been holding out for a lower number, with some consumers steadfastly bidding at about $85 per tonne, more are now acquiescing to the producers’ $95-per-tonne offers.
“After intense discussions with one of our suppliers today, we ended up concluding at $95,” a Japan-based consumer said. “[The supplier] did not budge even a bit, not even a dollar. Suppliers are definitely strong in a situation like this.”
Buyers are increasingly accepting of the $95 figure as there is a concern premiums could rise further in the new year, with high premiums in the USA likely to attract metal in 2017, while premiums are also rising in closer markets, such as South Korea. Few are prepared to wait until January to sign supply deals.
(Editing by Rod George)