The S&P Global Platts CIF Japan spot premium for aluminum ingot rose to $65-$80/mt plus London Metal Exchange cash CIF Japan on Tuesday, from $65-$70/mt on Monday, as Chinese buying pushed market higher, sources said.
The assessment in a wide range or $65-$80/mt plus LME cash CIF Japan reflected a divided market. overseas producers, having achieved sales at $90-$100/mt plus LME cash CIF China Monday, were targeting high premiums.
On the other hand, Japanese buyers pointed out to a domestic tender awarded Monday at Yen 201-202/kg ex-Yokohama warehouse for over 500 mt, which would be equivalent to LME cash price plus an import premium of $60-$63/mt and handling charges of $20-$30/mt.
There is no buyer in Japan who would pay a $80/mt premium following this tender result, Japanese buyers said.
On Tuesday, two Japanese traders said they were offered $80/mt plus LME cash CIF japan from two different producers, for December loading. There was also an offer at $90/mt plus LME cash CIF japan, for extremely prompt November loading.
The offers were rejected.
One producer told one Japanese trader spot sales were done into China at $90-$100/mt plus LME cash CIF China, and there was no reason to sell significantly lower to other destinations.
Two traders said they too had booked with Chinese buyers at $90-$100/mt plus LME CIF China Monday, as Shanghai Futures Exchange December contract traded several hundred dollars above LME, creating an opportunity for Chinese buyers to import.
Japanese domestic market, however, remained steady.
One Japanese consumer said he was offered by a local trader Yen 202-203/kg ex-warehouse Monday. according to his calculation, premiums would be $65-$70/mt over LME price of transaction day.
"Market has not changed," he said.
Platts does not take into account domestic spot deals into import premium assessment, as they are on different currencies and conversion process differs among deals.
Platts, however, noted that the domestic tender result was referred for market guidance by several Japanese market participants.
