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Some Japan buyers agree to pay 24-25% higher Q3 aluminium premium of $185/T

Credit: REUTERS/ARND WIEGMANN

Some Japanese aluminium buyers have agreed to pay a global producer a premium of $185 per tonne over the benchmark price for July-September shipments, up 24-25% from the current quarter, three sources involved in the pricing talks said.

By Yuka Obayashi

TOKYO, June 1 (Reuters) - Some Japanese aluminium buyers have agreed to pay a global producer a premium of $185 per tonne over the benchmark price for July-September shipments, up 24-25% from the current quarter, three sources involved in the pricing talks said.

The figure is higher than the $148-$149 per tonne paid in the April-June quarter and marks the fourth straight quarterly increase and the highest premiums since the April-June quarter in 2015.

Japan is Asia's biggest importer of the light metal and the premiums PREM-ALUM-JP for primary metal shipments it agrees to pay each quarter over the benchmark London Metal Exchange (LME) cash price CMAL0 set the benchmark for the region.

The deals were struck at an initial offer price of $185 a tonne offered last month by a global producer.

Another global producer has offered Japanese buyers premiums of $200 a tonne, according to the sources, who declined to be identified as they are not authorised to talk to the media.

"We have decided to take the $185 offer this week due to higher premiums in U.S. and European markets, backed by solid demand recovery from the COVID-19 pandemic crisis," a Japanese buyer source said.

Rising freight costs amid a tight container market was one of the factors behind the higher premiums, the source said.

Japanese buyers and global producers, including Rio Tinto Ltd RIO.AX and South32 Ltd S32.AX began price negotiations for the coming quarter last month, and the bargaining was expected to continue this month.

(Reporting by Yuka Obayashi; Editing by Himani Sarkar & Simon Cameron-Moore)

((Yuka.Obayashi@thomsonreuters.com; +813-4563-2761;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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