Japanese Buyers Set Q1 2025 Aluminium Premium at $228 Per Tonne Amid Tight Supply
Japanese buyers have agreed on a premium of $228 per tonne for aluminium imports in Q1 2025, marking a 0.87% to 12% decline from the previously offered range of $230-$260 per tonne. Despite the drop, the agreed premium is the highest since 2015 and represents a 30% increase compared to the ongoing quarter's premium of $175 per tonne. This settlement also marks the fourth consecutive quarterly increase in premiums.
A source at a Japanese end-buyer cited overseas supply risks and the potential for prolonged negotiations to drive prices higher as key reasons behind the agreement. “Although Japanese domestic demand remains sluggish, we settled at $228 due to overseas supply risks and the possibility that prolonged negotiations could push prices even higher,” the source stated.
Ongoing negotiations between other buyers and sellers reflect heightened concerns over tight aluminium supply in Asia. The situation has been exacerbated by China’s decision to cancel its 13% export tax rebate effective December 1, 2024. This change is expected to create a demand-supply gap for Asian rolling mills outside China, limiting their ability to produce semi-fabricated products. A global producer noted a rise in inquiries for primary aluminium as a result.
The outlook for primary aluminium supply remains constrained as many producers have reduced output due to rising global alumina prices. In November, Russian aluminium producer Rusal announced a 6% production cut, citing higher operational costs and weakened demand.
Additionally, environmental protection policies in China during the winter heating season have led to production cuts, particularly in Henan province. Meanwhile, Australia’s South32 recently withdrew its production forecast for the Mozal Aluminium Smelter in Mozambique due to post-election civil unrest, further intensifying supply concerns.
