Spot import trades of primary aluminum into Japan continued to be thin on a lack of physical buying interest, while premiums remained steady, industry sources said Monday.
Platts assessed spot import premiums into Japan at $87-$90/mt plus London Metal Exchange cash CIF Japan Monday, unchanged since September 18 amid a lack of fresh offers or bids as the market lacked direction.
A Japanese trader said spot premiums were generally steady, while another said not much was going on in the spot market as fourth quarter premiums recently settled at $90/mt plus LME cash CIF Japan, down from $90-$100/mt plus LME cash CIF for Q3.
The second Japanese trader, however, noted that the gap between LME cash and LME three-month prices had narrowed, possibly indicating tighter supply in the market and thereby potentially giving the spot premiums some support in the near future.
On Friday, the official LME cash and three-month prices for aluminum were $1,542-$1,542.50/mt and $1,563-$1,564/mt, respectively, compared with $1,523-$1,523.50/mt and $1,558-$1,558.50/mt, respectively, on August 17.
A third Japanese trader agreed that most traders had settled the Q4 premiums at $90/mt and the spot level was below $90/mt. He, however, had yet to conclude his Q4 contract, as he said the $90/mt level was not reasonable due to excess stocks in the country, and he was not in a rush to buy.
In addition, he said Japanese domestic premiums were at an equivalent of around $80/mt, thereby making the $90/mt Q4 import premiums a bit high.
Another Japanese trader had estimated Japan's aluminum stocks at the three main port warehouses of Yokohama, Nagoya and Osaka to be above 470,000 mt at the end of September, up more than 50% year on year but down nearly 5% month on month.
