Japanese buyers have agreed an aluminium premium of USD 240 per tonne with Rio Tinto Alcan for some January to March shipments, down from a record this quarter, reflecting easing demand as the world’s third largest economy slips into recession.
According to three sources, were at the bottom end of a range of offers by producers, below USD 247 offered by Alcoa and USD 249 offered by BHP.
The deals, expected to be agreed as soon as next week, will set a benchmark price for the region. Premiums are paid over the benchmark London Metal Exchange cash price to secure physical metal.
Still, premiums remain lofty, more than double this year’s first quarter terms of USD 112 and down just 6% from a record USD 254 to USD 255 for the current quarter.
They have been inflated mainly due to large stocks locked up by banks in financing deals, and behind long queues at warehouses, which make it difficult for manufacturers to access supplies.
Daniel Briesemann commodities analyst at Commerzbank in Frankfurt said that “The main reason is lower demand in Japan itself. Japanese aluminium consumers have gained more power in the negotiations, due to the fact that there is lower (automotive) production in Japan, and therefore lower demand for aluminium. But if we see signs that demand is picking up, I think we will see higher premiums again.”
Source:
http://www.steelguru.com/metals_news/Rio_Tinto_and_Japanese_buyers_set_aluminium_deals/297066.html
