TOKYO The premium for aluminium shipments to Japanese buyers for July to September was set at US$172 per metric tonne, up 16%-19% from the previous quarter, reflecting tighter supplies in Asia, five sources directly involved in pricing talks said.

The figure is higher than the US$145-US$148 per tonne paid in April to June and marks a second consecutive quarterly increase. But it was below the initial offers of US$175-US$190 per tonne made by global producers.

Japan is a major Asian importer of the light metal and the premiums for primary metal shipments it agrees to pay each quarter over the benchmark London Metal Exchange cash price set the benchmark for the region.

The increase from the previous quarter reflected tighter supplies in the region as some metals were diverted to Europe and the US where premiums were higher and demand was stronger, a source at a global producer said.

Demand for the light metal in Japan remained lacklustre, all the sources said.

Aluminium stocks at three major Japanese ports stood at 317,860 metric tonnes at the end of June, up about 3% from the previous month, according to Marubeni Corp.

The quarterly pricing talks began in late May between Japanese buyers and global suppliers including Rio Tinto and South32.

One producer lowered its offer to US$172 per tonne late last week after raising it once in mid-June to US$185 from the initial proposal of US$175, as the talks were dragging longer than usual, another source at a Japanese end-user said.

The negotiations usually end before the new quarter begins, but this time it took longer to settle due to wider gaps between buyers and sellers after the producer temporarily hiked its offer despite weak local demand, the second source said.

The sources declined to be identified because of the sensitivity of the discussions.

  - Reuters