Japan Q3 aluminium premium falls to $108/T on sluggish demand, sources say

By Yuka Obayashi

TOKYO, June 30 (Reuters) - The premium for aluminium shipments to Japanese buyers for July to September was set at $108 per metric ton, down 41% from the current quarter, reflecting sluggish demand, six sources directly involved in pricing talks said.

The figure, lower than the $182 per ton paid in April to June, marks a second consecutive quarterly decline and the lowest level since the first quarter of 2024. It comes below initial offers of $122 to $145 per ton made by global producers.

Japan is a major Asian importer of the light metal 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.

"Domestic aluminium demand has been weak for about a year, even before the U.S. tariffs kicked in," a trading house source said, referring to the Trump administration's levies on aluminium and cars.

"The decline in Japan's premiums reflects slack demand and ample supply in Asia," the source added.

Aluminium stocks at three major Japanese ports AL-STK-JPPRT rose to 331,000 tons at the end of May, up 3.3% from the previous month, according to Marubeni 8002.T.

A second source at a producer said soft overseas premiums also contributed to the drop.

"U.S. premiums rose briefly but eased lately as buyers built up stocks ahead of tariffs," the source said.

"We expect inventories to clear and premiums to rebound in the next quarter, which could tighten Asian supply," he said.

U.S. President Donald Trump doubled aluminium import tariffs to 50% from June 4 to support domestic production of the metal used in the transport, packaging and construction industries.

In the U.S., physical market premiums AUPc1 fell after peaking at a record 62.50 cents a lb on June 6 as traders also speculated that tariffs on Canadian shipments could be cut, metal industry sources said.

While Japan has seen limited local impact, buyers worry that demand from automakers might fall. Tokyo is pushing Washington to exempt its carmakers from a 25% auto tariff. Japan also faces a 24% "reciprocal" tariff rate starting on July 9 unless it can negotiate a deal with Washington.

The sources declined to be identified due to the sensitivity of the matter.

The quarterly pricing talks began in late May between Japanese buyers and global suppliers, including Rio Tinto RIO.L, RIO.AX and South32 S32.AX.