* Japan quarterly premium for Oct-Dec marks 7-year low
* Drop reflects softer spot premiums amid supply glut
* Producers cut offers from initial $80-$82/T proposals (Adds comments and details)
By Yuka Obayashi
TOKYO, Sept 30 (Reuters) - Japanese aluminium buyers have agreed to a premium of $75 a tonne for metal to be shipped over October-December, down 17-19 percent from the prior quarter, on softer spot premiums amid a supply glut, five sources directly involved in the talks said.
Japan is Asia's biggest importer of aluminium and the surcharges, or premiums, which consumers pay to producers on top of the London Metal Exchange cash price for primary metal shipments, set the benchmark for the region.
The latest deal marks a second straight quarterly drop and the lowest in more than seven years. For July-September, buyers had paid a premium of $90 to $93 per tonne PREM-ALUM-JP.
"We've struck the deals at $75 a tonne with three producers," a source with a buyer told Reuters, declining to be named due to the sensitivity of the talks.
A source at a producer said that all of his company's clients had agreed to contracts at $75 a tonne.
The quarterly pricing negotiations began last month between Japanese buyers and global producers, including Alcoa Inc , Rio Tinto and South32 Ltd, with offers ranging between $80 and $82 a tonne.
But suppliers were forced to cut their initial pricing ideas. Buyers were seeking premiums in the low $70 a tonne range, because of weaker spot premiums amid high locals stocks and soft demand in housing and construction in Japan.
Aluminium stocks at three major Japanese ports fell to 304,200 tonnes by end-August from a record high of 502,200 tonnes in May 2015, but they are still higher than the 230,000 tonnes to 270,000 tonnes held in early 2014.
Japan's combined output of rolled-aluminium products in July and August fell about 1 percent from a year ago, according to the Japan Aluminium Association.
"We are still not happy with $75 as the current spot premiums are lower, but producers were not compromising any further," a source at a fabricator said.
Japanese buyers are looking to reduce the amount of aluminium they purchase via annual contracts, instead turning to spot markets where premiums have dropped to their lowest in more than seven years.
Meanwhile, surcharges for physical aluminium have stabilised in Europe and the United States as more attractive financing deals and firmer demand tighten the market.
Reporting by Yuka Obayashi; Editing by Christian Schmollinger and Tom Hogue