Japan’s Q1 Aluminium Premium Climbs to Highest Level Since 2015

The aluminium premium for shipments to Japanese buyers for the first quarter of 2025 has been set at $228 per metric ton, marking the highest level in nearly a decade. This represents a significant increase from the $175 per metric ton premium in the previous quarter and marks the fourth consecutive quarterly rise, according to sources involved in pricing negotiations.

While the agreed premium is below the initial offers of $230 to $260 per ton made by global producers, it reflects heightened supply concerns amid stronger overseas premiums. Japan, as a major importer of aluminium in Asia, sets a regional benchmark for premiums over the London Metal Exchange (LME) cash price with its quarterly agreements.

Supply fears have been fueled by potential U.S. tariff increases on aluminium imports from Canada and Mexico, prompting buyers in Asia to secure additional metal. Additionally, the removal of China’s 13% export tax refund on aluminium semi-manufactured products as of December 1, 2024, has increased demand for ingots from Asian rolling mills to produce semi-finished products, sources noted.

“We have already received some inquiries for additional supply from Asian customers,” said a source at a global aluminium producer.

Despite these supply concerns, Japan’s domestic demand remains sluggish, particularly in the automotive and construction sectors. Aluminium stocks at three major Japanese ports rose to 323,600 tons by the end of December, a 13% increase from the previous month, according to data from Marubeni.

The quarterly pricing talks, which began in late November, involved Japanese buyers and global suppliers, including Rio Tinto and South32. The negotiations extended a month longer than usual, with most agreements finalized at $228 per ton by mid-December. However, some producers initially pushed for higher premiums before settling on the final figure.