News: RIO UPDATE 1-Japan buyers agree to pay Q2 aluminium premiums of $125-$130/T -sources

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The premiums for aluminium shipments to Japanese buyers for April to June were set at $125-$130 a tonne, up 45-53% from the previous quarter, to reflect higher spot premiums elsewhere in Asia, four people directly involved in pricing talks said.

The figures compare with $85-$86 per tonne paid in the January-March quarter and mark the first quarterly increase in six quarters. The higher prices are in line with or lower than the initial offers of $125-$145 per tonne made by producers.

Japan is Asia's biggest importer of the light metal and the premiums PREM-ALUM-JP for primary metal shipments it agrees to pay each quarter over the benchmark London Metal Exchange (LME) cash price CMAL0 set the benchmark for the region.

The hike reflected higher premiums in other Asian markets such as South Korea while the premiums in the United States and Europe remained at high levels, a source from a Japanese trading house said.

"We had to compromise to agree at $130 this week as a producer was not going to lower its offer any further," a source at a Japanese fabricator said.

Both sides share the view that local demand for the light metal remains weak due to slow recovery in automobile production, causing high levels of inventories.

Aluminium stocks at three major Japanese ports AL-STK-JPPRT stood at 370,700 tonnes at the end of March, above 354,300 tonnes a year earlier, according to Marubeni Corp 8002.T .

But lower import during the last quarter will likely trim the inventory in the coming months, another source at a producer said.

Japan's import of aluminium and aluminium alloys in January-March declined by 23% from a year earlier, the trade data shows.

The quarterly pricing talks, which began in late February between Japanese buyers and global suppliers, including Rio Tinto Ltd (RIO) and South32 Ltd (S32) , have dragged on for a month longer than usual because of a wide gap in two sides' market outlooks. The last round of talks also

lasted long

	.