SYDNEY/HONG KONG, Jan 13 （Reuters） - Premiums for spot primary aluminium in Asia are unlikely to rise after Rio Tinto declared force majeure on shipments from its Boyne unit, due to weak demand and sufficient supplies.
"It should not affect premiums in Asia. But some people may try to push up LME prices," a trading source in Hong Kong said.
Rio declared force majeure on supplies of aluminium from its Boyne smelting division in Australia's Queensland state due to severe flooding, the company said Thursday.
Flooding that has already brought much of the state's coal mining industry to a halt and closed the port of Brisbane was preventing deliveries to some domestic and international customers, Rio said.
Boyne Smelters Ltd, 59.4 per cent owned by Rio and operated by its Alcan division, is Australia's largest aluminium smelting operation and is located near Gladstone in central coastal Queensland.
"Rio Tinto Alcan is investigating alternative arrangements for customers, including shipping aluminium directly out of the Gladstone port," the company said.
It also said it was unable to provide an estimate of the full impact of the disruption or the duration of the force majeure declaration.
Smelting operations at Boyne are capable of producing 558,000 tonnes of aluminium annually, according to Rio's website.
An industry source said Boyne's aluminium is sold mostly into domestic markets, Japan and South Korea under contracted price terms, with little if any metal shipped to China and southeast Asian countries.
Contracted shipments to Japan and South Korea normally do not be departed from the Brisbane port, he added.
"Spot premiums should not be affected, unless the problem lasts for months, as that could force clients to buy from the spot market," the source said.
Aluminum prices , which slumped dramatically during the recession, rose 11 percent last year -- 5 percent in the fourth quarter alone -- and are now near a two-year peak of $2,500 per tonne.
Last month Rio declared force majeure for coal sales contracts from mines in which it has a majority interest in Queensland's Bowen Basin coal district.
Traders said import demand for spot metal from China, the world's top aluminium consumer and producer, was extremely weak ahead of the Lunar New Year, which falls on Feb. 3 this year. Chinese fabricators typically closed operations for 2-4 weeks for the holidays, depending on orders.
"If there are any impacts on contracted shipments to the Chinese, they probably would say: 'good,' the imports are not coming so soon," a trader at an international trading house said, adding Chinese buyers would store imports due to arrive soon in warehouses.
Chinese buyers were also unwilling to book spot imports due to high LME prices currently.
Demand from South Korea, a major spot aluminium buyer in Asia, was steady and was being covered by metal already in Asia, the trader said.
Spot good-Western metal such as Australian and South Africa origins were offered at premiums of $105-$110 a tonne over cash LME prices to buyers in South Korea and China and premiums of about $100 to Hong Kong, on cost, freight and insurance basis, traders said.
The premiums rose from just above $100 two month earlier but were lower than $112-$113 paid by Japanese buyers for shipments in the first quarter of this year, which is typically seen the benchmark in Asia for quarterly premiums.
豫公网安备41010502003434号