Russian aluminum producer Rusal has asked Japanese buyers for a rollover in the third-quarter contract premium from the second quarter's level of $128/mt plus London Metal Exchange cash CIF Japan, several Japanese buyers said Friday.
Rusal Japan has sent an email to Japanese buyers late Thursday, the buyers said.
Rusal Japan could not be reached for confirmation.
A Japanese trader and a Japanese consumer said they were waiting for offers from other producers Rio Tinto Japan, South32 and Alcoa for Q3 before placing their counterbids.
The buyers said the Asian market remains oversupplied as aluminum LME warrants were canceled in the first four months of the year.
Some have been offered in the physical spot market rather than going back into the LME warehouses, they said.
The LME cash-three months spread falling into backwardation this week has also spurred sell-offs in international markets, said one Japanese trader.
Meanwhile, suppliers told S&P Global Platts earlier that there is tightness in some market segments affected by strong demand and smelter cutbacks in Australia and the Middle East.
Buyers and sellers also have different analysis of the domestic stock situation.
One international trader, who does not directly participate in the quarterly premium talks, pointed out that Japanese domestic stocks have fallen, causing tightness in supplies and giving support to the premiums.
Meanwhile, several Japanese consumer and trade sources said there is only a temporary tightness that disappears after ships arrive.
Japan's stocks of aluminum at three main port warehouses stood at 250,300 mt at the end of April, down 7.6% from March, according to trading house Marubeni.
A Japanese consumer plans to issue a tender next week for around 2,000 mt for October-December period, on ex-main port warehouse basis, sources said.
Although the delivery term is after Q3, the tender award level will be one indication of the near-term market outlook, said one source.
