* April-June premium the highest in 2 years
* Local spot premiums rise, reflect higher overseas premiums
* Producers' initial proposals were at $135/T
(Adds comments and details)
By Yuka Obayashi
TOKYO, March 29 Japan's aluminium premium for
shipments during the April to June quarter has been set at $128
per tonne, up about a third from the quarter before due to
higher overseas prices, five sources directly involved in the
pricing talks said on Wednesday.
Japan is Asia's biggest importer of aluminium and the
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 new premium is 35 percent higher than the $95 per tonne
premium PREM-ALUM-JP in the previous quarter and is the second
quarterly increase in a row and the highest in two years.
"We've signed the deals at $128 a tonne with all of the
producers whom we've talked to," a source at an end-user said.
He declined to be named due to the sensitivity of the talks.
A source at a producer said all of his company's customers
had agreed to contracts at $128 a tonne this week.
The quarterly pricing negotiations began last month between
Japanese buyers and global producers, including Rio Tinto
,, South32 and Alcoa Corp, with
offers at $135 a tonne.
The increase comes after U.S. and European spot premiums
have risen by about $20 to $50 per tonne over the past few
months amid output disruption at Alcoa's Portland smelter and a
production cut at Rio's Boyne smelter in Australia where costs
of power have been rising.
Buyers were initially seeking premiums between $110-115 a
tonne, but compromised after local spot premiums climbed $10-20
a tonne in the past month, a source at a trading house said.
"Local premiums rose during the talks after producers have
changed destination of some shipments to the U.S. where the spot
premiums were higher than Asia," he said.
Producers were also forced to trim their offers as buyers
were not feeling supply tightness that much, buyer sources said.
Aluminium stocks at three major Japanese ports rose 3.3
percent to 282,000 tonnes in February from the previous month,
according to trading house Marubeni.
"Still, overall demand for aluminium is pretty healthy here,
backed by wider use of the metal in automobiles," Akio Hamaji,
chairman of the Japan Aluminium Association, told a news
conference on Wednesday.
The association said the country's demand for aluminium
products rose 1.7 percent in the financial year ending this
month and would increase 0.7 percent next year to 4.156 million
(Reporting by Yuka Obayashi; Editing by Christian Schmollinger
and Mark Potter)