Japanese Q1 aluminum premium jumps 30% to $228/mt CIF Japan

Platts, part of S&P Global Commodity Insights, assessed the first-quarter premium for imported primary aluminum at $228/mt plus London Metal Exchange cash, CIF main Japanese ports, on Jan. 22, up 30.29% from $175/mt in the fourth quarter.

The Q1 MJP premium assessment was based on 12 trades done between Dec. 12 and Jan. 22. All deals were concluded at $228/mt with a total minimum volume of 15,000 mt/month, plus LME cash, CIF Japan for seaborne P1020/P1020A ingot loading over January to March.

Offers during the negotiations ranged $228-$260/mt CIF Japan.

The Q1 MJP premium at $228/mt has been the highest, up 11.22%, since fourth-quarter 2021 when premiums were assessed at $205/mt. Market participants attributed the spike to a series of developments in the months leading to Q1.

On the supply side, production cuts were observed due to high costs as alumina prices reached a historic high Dec. 4. Platts assessed alumina FOB Australia at $805/mt on Dec. 4, Commodity Insights data showed.

RUSAL reduced production(opens in a new tab) Nov. 25 in response to high alumina prices and bearish macroeconomic trends.

In addition to production cuts, China's removal of export tax rebates also set the way for high premiums in Asia as "there would be quite a huge gap to fill" due to more inquiries for primary aluminum imports to China, according to sources.

South32's withdrawal of its 63.7%-owned Mozal Aluminum smelter's production guidance(opens in a new tab) amid escalating civil unrest Dec. 10 was also said to have tightened global supplies, lifting premiums in Asia.

Platts assessed the CIF main Asian ports spot P1020 aluminum premium at $219/mt plus London Metal Exchange cash Jan. 22, down $1/mt on the day and up $14/mt from the start of 2025.

Market participants' near-term outlook for Asia remains mixed with some remaining bullish amid expectations of supply tightness and high production costs, despite tepid demand for aluminum from Japan, while others were uncertain if premiums for the next quarter would remain supported.

December aluminum inventory levels in Japan were higher month over month and year over year. Port stocks at main Japanese ports at the end of December stood at 323,600 mt, up 13.23% from 285,800 mt on the month and up 2.86% from 314,600 mt a year ago.

On Jan. 22, the Platts CIF Japan spot premium for 99.7% P1020/P1020A aluminum ingot was assessed at $2/5mt plus London Metal Exchange cash, CIF Japan, unchanged on the day, according to data from Commodity Insights.

Platts specifications are for all quarterly settlements on a CIF main Japanese port basis, negotiated before the quarter between two unaffiliated counterparties, for P1020/P1020A 99.7% primary aluminum ingot, with payment in cash against documents, for volumes of 500 mt/month or more under annual contracts.