News: RIO UPDATE 1-Some Japanese aluminium buyers agree to higher April-June premiums

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Some Japanese aluminium buyers have agreed to pay global producers premiums in the April-June quarter of 2023 that are as much as 53% higher than the previous quarter, reflecting higher overseas prices, sources involved in the price talks said.

The Japanese buyers will pay premiums of between $125-$130 per tonne for shipments in April to June, the five sources, who declined to be identified because of the sensitivity of the discussions, said this week.

That is up from the $85-$86 per tonne paid in the January-March quarter and marks the first quarterly increase in six. 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 aluminium 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.

"We have settled the deals, at $125 a tonne with one producer and at $130 with two producers," said one of the sources, who negotiates the premiums for a Japanese aluminium fabricator.

The increase reflected tighter supply and higher premiums other markets in the United States, Europe and Southeast Asia, said another of the sources, from a Japanese trading house.

But other buyers are still negotiating, with hopes to finalise deals next week, said two other sources at Japanese end-users.

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 almost a month longer than usual because of a wide gap in two sides' market outlooks.