Platts assessed spot Japanese aluminum import premiums at $85-$90/mt plus London Metal Exchange cash CIF Japan Monday, unchanged from October 27 as the impact of the rising US premiums have been limited.
Two producers that supply to Europe, the US as well as Asia, said Monday spot premiums in Asia did not yet move as a result of the recent $14/mt premium rise in the US, to 8.25 cents/lb ($181.50/mt) on November 13 from 7.6 cents/lb ($167.20/mt) on November 2.
There is no noticeable increase in the inquiry from the US for spot ingot cargoes and in fact, there has been none for this month so far, said one producer.
A second producer said while he had observed premiums in the uptrend in the US and Europe, it was not the case for Asia.
They reported no spot sales to Japan, adding that level of premiums for spot sales to other Asian countries remain unchanged in the last few weeks.
Some market participants, however, said there is less likelihood of a downside from the current premium levels.
"Everyone is quite comfortable, there is nothing unsold for January," said one trader.
Several traders pointed out to possibilities of Japanese contract ingot premiums for the first quarter of 2016 rising from $90/mt for the current quarter, tracking the US premiums. The first trader forecast a rise of around $5/mt.
The negotiations for the Q1 contract premiums for ingot are expected to heat up next week, while talks for the 2016 value added products contracts have started earlier this month.
"Other markets are on the uptrend and there are possibilities of Japanese premiums rising. Japanese stock levels are down too," said a second trader.
A third trader said: "It is scary to be competitive. What if you sell at low levels [to domestic customers] and realize January-March contract premiums are up?"
One Japanese consumer, however, said there was no change in Asian demand and supply fundamentals, which, in his opinion, stays weak.
"Producers have started negotiations for the 2016 annual contracts for value added products.
Producers have put priority on maintaining the sales volumes for the coming year rather than asking for hike in prices," the consumer said.
He said 2016 upcharge for billet is discussed between $160-$180/mt, foundry alloys $130/mt, and slab $140/mt. Upcharge is fee for processing ingot into billet, slab and foundry alloys.
"Upcharge for some foundry alloys were at $140/mt in 2015, but we will not see this number in 2016 in depressed market conditions," said an overseas supplier.
