Forecasts and market analysis based on price assessments from Fastmarkets MB and Fastmarkets AMM

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September 2019 | Aluminium Weekly Market Tracker

Primary and Secondary

Analysis of consumption and production of primary aluminium, and an analysis of the market drivers of secondary aluminium and aluminium.

Demand Analysis:

Japan, Asia’s largest aluminium importer, is accelerating its shift away from the traditional quarterly benchmark premium system to purchase more units on the spot market and reduce its exposure to price volatility. For years, Japanese end users have bought their primary aluminium from overseas suppliers based on a quarterly main Japanese port (MJP) premium paid over the London Metal Exchange cash price.

But in the past two years, Japanese buyers have cut the volumes bought under medium-term contracts in favor of spot purchases. The ratio between the usage of the quarterly versus the spot premiums, especially for P1020 aluminium ingots, used to be high at 80% to 20% around three years ago. But now, according to Fastmarkets research, the ratios have changed and could be as low as 60% to 40%.

Why switch?

The shift largely started with end users, who disagreed with the level...


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