According to sources yesterday, Japan's aluminum premium negotiations in the first quarter of 2009 are currently progressing slowly because the focus of both parties is mainly on the amount of purchases.

Three representatives of Western aluminum producers met with Japanese buyers last week and proposed a price increase of $65/tonne over the LME Luminaire CIF cash price, which is lower than the $75-77/tonne this quarter. Due to concerns about the demand outlook, buyers expect to cut their purchases by 20%-30%.

It is said that in the first quarter of 2009, Japan will need to reduce imports by at least 100,000 metric tons, equivalent to the load of five 25,000 metric-ton ships.

At present, it appears that Sheng Shui has become the second element of aluminum imports. At present, only one buyer requires the premium to be set at 50-60 US$/metric ton, and two traders have already estimated that the premium will be set at 60-65 US$/metric ton. .

Manufacturer may cancel export

Buyers looking to reduce import volume worry that producers may decide to cancel aluminum exports to Japan in the first quarter.

"It would be better to sell aluminium ingots to LME warehouses instead of selling them to buyers at lower premium prices, and get $40/metric ton of funds." Another trader said, "I believe producers will quickly stockpile LME Asian stocks."

However, according to the manufacturer's information, “Even if the cancellation of exports to Japan is only possible in the first quarter of 2008, because demand in Asia outside of Japan is stable, and current demand in all countries is decelerating,” which also means that in 2009 The possibility of canceling exports is minimal.

The news also indicated that China may reduce aluminum export tariffs, which will further reduce the demand for high-quality Western aluminum ingots.