The first quarterly aluminum premium deal for monthly shipments over April-June between a major Japanese consumer and an international trader was closed at $82/mt, plus London Metal Exchange cash settlement average of the shipment month, CIF Japan, several industry sources told Platts Tuesday.
The buyer confirmed the contractual premium at $82/mt and volume at over 500 mt/month for Good Western metal. The official bid at $75/mt was still valid in negotiations with other suppliers, according to the consumer.
The deal was 22% below Platts Q2 2019 assessment of $105/mt, and was also down from the Q1 assessment of $83/mt.
Sources said historically Q2 premiums were higher than Q1 because seasonal demand rises as Japanese companies start a new fiscal year cycle. But, this year, market sentiment has been more bearish because of the effects of the novel coronavirus outbreak.
Prior to the deal, buying ideas from Japanese consumers and traders directly involved in quarterly premium negotiations were heard as high as $90-$95/mt on February 14, $75-$85/mt during the week of March 2 and $70-$80/mt this week.
Meanwhile, firm offers received from three producers were reported at $105/mt, $105/mt and $98/mt, respectively, since the end of February.
"Producers are sort of on the sidelines now. Japanese consumers wish to buy and so traders start to step in and make markets," said another international trader who was finalizing a couple of thousand tons with two consumers and one trader within a range of $81-$83/mt.
Two producers were unable to comment by market close on Tuesday.
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