Japan's aluminium P1020 premiums for the first quarter of 2025 was settled at $228/t over cash London Metal Exchange (LME) prices. Premiums rose by $53/t from the previous quarter, reaching the highest level since Argus began the assessment in 2016.
Initial offers were much higher at above $240/t in December, and only a small volume was concluded at $228/t to Japan. The significant increase was primarily driven by concerns over future supply in the seaborne market and escalating trade measures in the global market.
Some suppliers either withdrew their production forecasts or planned to reduce output levels, fuelling concerns about tight supply. China announced the cancellation of the 13pc export tax rebate for fabricated aluminium products from 1 December 2024, which led to increased demand from rolling mills outside China. The premium in the US also rose because of potential higher import tariffs.
But demand in Japan is still weak owing to slow domestic car production and construction activity. Japan's domestic car production continued its downward trajectory for most of 2024, with output recording a year-on-year fall for every month from January to November, except in May and July.
