Japanese Aluminum Buyers See Record Premiums Coming

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Aluminum buyers in Japan, Asia’s biggest importer, agreed to pay a record fee to producers next quarter as the global market will stay in a deficit, 3 people involved in the negotiations told Bloomberg News.

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The surcharge for the 3 months beginning in January is $425 a metric ton above the London Metal Exchange cash price, the people said, asking not to be identified because the talks are confidential. The fee was $420 this quarter.

Premiums to Japan surged 71% this year and reached records every quarter as output cuts by smelters including United Co. Rusal and Alcoa Inc. are creating a global shortage.

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Following a three-day flat streak, the price of Chinese aluminum scrap dropped by 2.3% to end at CNY 12,600 ($2,026) per metric ton on Thursday, December 25. The Chinese aluminum cash price saw a 0.2% decline to CNY 13,020 ($2,093) per metric ton. After falling 0.2% to CNY 13,030 ($2,095) per metric ton, the price of Chinese aluminum bar reached a 30-day low. The price of Chinese aluminum billet remained essentially flat at CNY 13,700 ($2,203) per metric ton.

On the LME, the primary aluminum cash price declined 1.0% to $1,833 per metric ton. On the LME, the 3-month price of aluminum fell 0.8% to $1,864 per metric ton. Following a 0.4% rise on Wednesday, the cash price of primary Indian aluminum closed at INR 119.15 ($1.88) per kilogram.

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