By Yuka Obayashi
TOKYO- A global aluminum producer has offered Japanese buyers a premium of $175 per metric ton for July-September primary metal shipments, up 18 percent to 21 percent from the current quarter, three sources directly involved in quarterly pricing talks said on Wednesday.
Japan is a major Asian importer of the light metal and the premiums for primary metal shipments it agrees to pay each quarter over the London Metal Exchange (LME) cash price set the benchmark for the region.
For the April-June quarter, Japanese buyers agreed to pay a premium of $145-$148 per ton up 61 percent to 64 percent from the prior quarter.
“The increase reflected tighter supply in Asia due to strong demand from European customers,” said a source at the producer, noting that higher premiums in Europe were attracting global producers to send supply to the region. He added premiums in North America were also much higher than in Asia.
Japanese buyers, however, consider the level as too high because demand in the country’s industrial and construction sectors remains sluggish and inventories are adequate, another source at a Japanese trading house said.
The sources declined to be identified because of the sensitivity of the discussions. -Reuters
