Singapore 27/12/2016 - More aluminium supply deals in Japan for the first quarter next year are being settled at $95 per tonne cif MJP (main Japanese ports).
Another two first-quarter deals for at least 3,000 tonnes and around 1,500 tonnes were reported to Metal Bulletin at $95 per tonne by Japanese buyers on Tuesday December 27.
This follows four deals which Japanese buyers reported at $95 per tonne last Thursday – this is 27% higher than the current quarter’s premium of $75.
"We settled the first quarter MJP at $95 as well, like everybody else. We feel it is a bit too high but due to the problems at Alcoa’s Portland smelter, that [has] caused some impact on Japanese premiums," a Japan-based consumer said on Tuesday.
Alcoa’s Portland aluminium smelter in Australia has been running at less than 30% of its production capacity since a power outage curtailed its output at the start of this month, the company said on December 21.
Many Japanese buyers had initially hoped to settle at a lower range of $85-90 per tonne, which was what some consumers had bid at. But buyers have increasingly accepted the $95 figure as there is a concern that 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.
(Editing by Kyle Docherty)