TOKYO: S&P Global Platts assessed the spot premiums for aluminum imports at $79-$80/mt plus LME cash CIF Japan on Thursday, down from $80-$85/mt plus LME cash CIF Japan on Wednesday as more sellers emerged in the market. Only three days after the third quarter contract premium negotiations settled at $90-$93/mt plus LME cash CIF Japan, a producer expressed an interest to sell spot cargoes at lower premiums, a Japanese trader said.
This week, two or more producers offered spot cargoes. A producer offered another Japanese trader P1020A ingot at $80/mt plus LME cash CIF Japan, for loading anytime over July to September for a lot of 500 mt or more. The offer was valid Thursday, said a source close to the discussions. The trader counter-bid at $78/mt plus LME cash CIF Japan, which the producer rejected, according to the source.
Earlier this week, an Indian producer closed a deal at $75/mt plus LME cash CIF Japan, for 500-1,000 mt of material for August loading, sold to a Japanese end-user. An international trader said: “Just about all the smelters are offering, they have stocks.” He was ready to offer $75/mt plus LME cash CIF Japan, but had not received inquiries, he added. Another international trader agreed that there were more sellers. “Spreads are not healthy, and the cost of carrying over the metal [as stocks] is high,” he said. “Cash-three months spread of $13/mt is better than backwardation, but this is not what it used to be several years ago.”
A Japanese consumer said that he had been approached by several sellers recently but no specifics were decided. The $75/mt plus LME cash CIF Japan deal for Indian metal was not taken into account in the Platts assessment, as the material falls outside Platts specifications. Japanese traders said Indian metal was sold at a discount of $10-$20/mt. A third Japanese trader explained that in some cases, the $15/mt port handling charge was not included when importing from India. No further details on the deal were available, however.
