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Global aluminium producers have offered Japanese buyers premiums of $145-$155 per metric ton for April-June primary metal shipments, up 61%-72% from the current quarter, three sources directly involved in quarterly pricing talks said on Thursday.
Japan is Asia's major importer of the metal and the premiums for primary metal shipments it agrees to pay each quarter over the London Metal Exchange (LME) cash price CMAL0 set the benchmark for the region.
For the January-March quarter, Japanese buyers agreed to pay a premium of $90 per ton PREM-ALUM-JP , down 7% from the prior quarter.
The large hike comes as supply in Asia is tightening because of increased imports from China, though Japan's local demand remains sluggish, a source at a producer said.
"Q2 delivery supplies are sold at a premium of $120-$130 elsewhere in Asia, and the spot premium in Japan is also rising rapidly, with the latest transaction occurring above $130," the source said.
Japanese buyers also see an increase from the current quarter as inevitable due to tight supply, but they view the proposed hike as too large, another source at an end-user said, noting his company is seeking $115 a ton.
The third source at a trading company said he expects it will settle between $120 and $140 a ton.
The sources declined to be identified because of the sensitivity of the discussions.
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