Japan's January aluminum port stocks still high above 220,000 mt

Stocks of primary aluminum products stored at Japan's three main ports were 220,700-220,800/mt at the end of January, holding high above 220,000 mt, local traders said Monday. The stocks are for primary aluminum ingots, sows, T-bars, alloys, billets and slabs stored at warehouses close to Yokohama, Nagoya and Osaka ports.

According to a survey by the Tokyo-based trading house Marubeni, the stocks totalled 220,700 mt at the end of January, down from 223,600 mt a month ago. But they were higher than the end-November level of 210,000 mt. A second trading house estimated end-January port stocks at 220,800 mt, down from 225,600 mt in December, but above 207,000 mt in November.

Several Tokyo traders said they were previously expecting lower stock figures of around 200,000 mt for the end of January. Japanese trading houses and consumers have been making stocks reduction efforts from December last year, ahead of the Japanese financial year closing in March. Some Japanese buyers had decreased purchase volumes for the current quarter. Spot import trade remained lackluster with only one deal reported since December.

Consumers needing additional spot supply had been able to buy locally. But the stock decrease over December to January were limited to 3,000 mt, due to decreases in the outgoing cargoes, said a Marubeni trader.

"Large rolling mills [consuming over 15,000 mt/month] are doing well, thanks to stable beverage can demand, but good demand is not evenly spread out in the sector," the trader said. The 220,700-220,800 mt port stocks figure suggests Japan has more than one-month's consumption of 200,000 mt, and that negotiators for import premiums for April-June contract shipments would be under pressure to win lower premiums, said another Tokyo trader. The premium negotiations for the coming quarter between Japanese buyers and global suppliers, are expected to start next week in Tokyo.