Bloomberg reported that aluminum buyers in Japan are set to secure the first fee reduction in a year from suppliers as the economy sinks into a recession.
The executives said that premiums for the three months starting in January may drop about 4% from fees this quarter that ranged between USD 253 per tonne and USD 255 per tonne over the London Metal Exchange cash price.
Fees more than doubled in the past 12 months, reaching a record this quarter, supported by rising premiums in Europe and the US. Now Japan’s economy is shrinking, contracting an annualized 3.5% last quarter the most since the earthquake and tsunami in early 2011. Gross domestic product may decline a further 0.4% in the final three months of this year, the third technical recession since 2008.
Mr Koji Iida head of statistics at the Japan Aluminium Association said that “It’s hard to find factors that may push up metal demand in the second half of this fiscal year. We are concerned about demand from the auto sector as the anti Japan campaign in China is taking a toll.”
