Platts Chinese import premiums for Good Western aluminum rose to $330-360/mt CFR plus LME cash Wednesday from $270-280/mt a week earlier as premiums in Europe, the US and Japan remained high.
Western producers' offers to Japan for third quarter contracts have breached the $400/mt level due to rising premiums in Europe and the US recently, and Japanese buyers were likely to accept the higher levels, multiple market sources said
"It's very tough for the Japanese to reject as the demand is there, and premiums in Europe and US are already so high," s Shanghai-based trader said.
Another Shanghai-based trader agreed, adding: "The Japanese are looking at around $380/mt currently, but it will be tough."
With premium levels high internationally, China premiums have also risen despite a lack of spot import trade, sources said.
"There's no point for the Chinese to import now, but based on current world premiums, the levels delivered to China must be at least $300-350/mt," a Beijing-based trader said.
Multiple sources agreed there was no Chinese consumer interest in buying due to the high premiums and comparatively lower domestic aluminum prices, though some might consider buying for delivery into bonded warehouses with the intention to resell to Japan.
"Those buying into bonded warehouses can probably pay close to the current CIF Japan premiums of about $360/mt, since they can resell higher to Japan," the first Shanghai-based trader said.
The second Shanghai-based trader agreed, adding they started reselling some material from the bonded warehouses to Japan recently.
"Our customers also have stocks in the bonded warehouses and are considering reselling, but not yet," a Beijing-based trader said. China's spot aluminum was trading at around Yuan 13,300/mt ($2,155/mt) Wednesday. The LME official cash price closed Tuesday at $1,777.50/mt.
