Japanese aluminium premium expected to rise in later 2024 owing to firmer domestic demand

Japan is the largest importer of aluminium in Asia. The premiums it agrees to pay each quarter, in addition to the London Metal Exchange (LME) cash price, establish the standard for the area. The Japanese premiums for this quarter have decreased to $97 per tonne, representing a 24 per cent decline compared to the previous quarter. This decline may be attributed to weak demand both domestically and internationally.

"Japan premiums are expected to climb in later 2024 to reflect tighter supply in Asia due to higher imports from China," said Eisuke Akasaka, general manager at Marubeni's light metals section.

During the talks for primary metal shipments from January to March, a leading global aluminium manufacturer has proposed a premium of $95 per tonne to Japanese purchasers. This premium is 2 per cent lower than the previous quarter and is intended to account for the weak demand and excessive stocks. Marubeni 8002.T, a prominent Japanese aluminium trader, forecasted that the premiums would remain within the $75-95 level throughout January-March but are expected to fluctuate between $90 and $150 for the remainder of 2024.