Negotiations for Japanese fourth-quarter aluminum premiums moved on with eight settlements reported so far at $103/mt plus London Metal Exchange cash, CIF Japan, while more than 10 companies are still engaged in talks, sources said Friday.
A $103/mt CIF Japan premium represents a decline of 22% from $132/mt CIF Japan for the third quarter.
The eight deals are for 6,000-8,000 mt/month shipments of standard P1020/P1020A aluminum ingot combined, to be shipped over October-December period.
One producer has offered $110/mt plus LME cash CIF Japan, and a second producer $112/mt plus LME cash CIF Japan, while Japanese buyers are bidding $103/mt plus LME cash, CIF Japan or less, sources said.
Russian producer Rusal has offered $111/mt plus LME cash, CIF Japan for Q4, sources said.
Japanese buyers have not responded to the Rusal offer due to the US sanctions against the company. There is no clarity whether the sanctions will be lifted or continue after October 23, the last day of the sanction wind-down period, the buyers said.
The Japanese import volumes of primary ingot from Russia over January-March, before the April 6 US sanctions, totaled 62,672 mt, or roughly 20,000 mt/month, according to Japanese customs data.
There was no decline in volumes after April, with 21,448 mt imported in that month, 24,986 mt in May, 22,969 mt in June and 23,367 mt in July.
Not all Japanese companies have been able to process transactions with Rusal. Some Japanese buyers have decided to suspend them until the sanctions were lifted, sources said.
Japanese traders said the decision related to Japanese banks' policies. One city bank was able to process Rusal transactions, but another bank decided to wait for more clarity, they added.
But companies that have suspended trades with Rusal were buying limited volumes and did not affect the overall imports from Rusal, they said.
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