Japan’s Aluminium Premiums Surge to Record High for Q1 2025

Japan's aluminium P1020 premiums for the first quarter of 2025 have been finalized at $228 per tonne over the cash London Metal Exchange (LME) price, marking a $53 per tonne increase from the previous quarter. This surge represents the highest premium level since Argus began tracking the market in 2016.

Initial offers in December exceeded $240 per tonne, but only limited transactions closed at the settled $228 per tonne rate. The sharp increase stems from growing concerns over seaborne supply and tightening global trade measures. Supply fears intensified as some producers scaled back output forecasts or planned production cuts. Additionally, China’s cancellation of the 13% export tax rebate on fabricated aluminium products from December 1, 2024, boosted demand for aluminium from non-Chinese rolling mills. Rising US premiums, driven by the possibility of higher import tariffs, also contributed to upward pressure on prices.

However, Japan’s domestic demand for aluminium remains weak, hindered by declining car production and sluggish construction activity. Japan’s automotive sector saw consistent year-on-year declines in output throughout 2024, except for slight increases in May and July.