Reuters reported that term premiums for primary aluminum shipments to Japan for the April to June quarter were mostly set at USD 113 per tonne flat from USD 112 to USD 113 for the current quarter.
Traders said that some deals were done at USD 112 and USD 114 but the bulk was agreed to at USD 113. Some negotiations were halted after Friday's devastating earthquake in northern Japan.
Traders and end users had hoped for a further cut to premiums due to a sluggish outlook for domestic demand but had said suppliers may resist as current demand had not been as weak as previously thought. Suppliers have kept their stance that global supply and demand balances remained tight.
Some traders said that the earthquake would cool demand in the near term, given that many Japanese factories were shut after the quake and automakers have stopped production for now.
One buyer said that in the near term it could dampen demand and prompt buyers to revise their purchase plans affecting premiums. But demand could pick up over the long term when the prospect for recovery becomes clear and aluminum stocks become tight.
Trading house Marubeni Corporation said aluminum stocks held at three major Japanese ports at the end of February fell 5.7% from a month earlier to 208,100 tonnes reflecting low import volumes. The premiums are over the London Metal Exchange cash price and include insurance and freight costs.
Negotiations for the talks began late last month between Japanese buyers such as trading houses and aluminium mills and suppliers, including mining giants such as BHP Billiton.
(Sourced from Reuters)
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