May 29, 2018 / 10:38 AM / 5 months ago

UPDATE 1-Aluminium producers seek up to 24 pct higher Q3 premiums from Japan buyers -sources

* Producers offer Q3 premiums of $159/T, $160/T, vs $129/T in Q2

* The offer, if accepted, will mark the highest in over 3 years

* Offers reflect firmer U.S. premiums amid U.S. sanction on Rusal (Adds comments and details)

By Yuka Obayashi

TOKYO, May 29 (Reuters) - Two global aluminium producers have offered Japanese buyers a premium of $159-160 per tonne for primary metal shipments for the July-September quarter, up 23-24 percent from the current quarter, four sources directly involved in pricing talks said.

Japan is Asia's biggest aluminium importer and the premiums for primary metal shipments it agrees to pay each quarter over the London Metal Exchange (LME) cash price set the benchmark for the region.

The premium, if accepted, would be the highest in over three years and the third straight quarterly rise, reflecting premiums in the United States that have surged amid the country's tariffs on aluminium imports and sanctions on Rusal - the world's No.2 producer of the metal.

"We have received an offer at $159 per tonne from one producer and at $160 from another supplier late on Monday," a source at a trading house said on Tuesday.

"The producers claimed firmer U.S. spot premiums and tighter supplies due to U.S. sanction on Rusal as the reasons for their stronger offers, but we are not feeling physical tightness in Asia at least for now," another source at a fabricator said.

For the quarter ending June, Japanese buyers agreed to pay a premium of $129 PREM-ALUM-JP, up 25 percent from the prior quarter to reflect the spike in U.S. spot premiums.

Spot premiums in the United States have more than doubled so far this year, underpinned by a 10 percent tariff on aluminium imports to counter what U.S. President Donald Trump has described as unfair international competition.

The United States' move in April to impose sanctions on Rusal, preventing customers with U.S. exposure from continuing to buy metal from the company, fanned further supply worries and drove up benchmark London prices to their highest in almost seven years.

But Rusal resumed shipping aluminium to some customers earlier this month following an extension of the deadline for companies to wind down contracts under the U.S. sanctions, sources told Reuters last week.

Given the uncertainty about global metal supply, all the sources said they expect "more difficult negotiations than usual" between Japanese buyers and producers.

The latest quarterly pricing negotiations began this week between Japanese buyers and smelters, including Rio Tinto Ltd , Rusal, South32 Ltd and Alcoa Corp and are expected to continue through next month. (Reporting by Yuka Obayashi; Editing by Himani Sarkar)

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