Western traders and producers' sales in Asia may be below expectations

Tag : aluminium ware
Japanese buyers said they ware receiving constant spot offersfrom the West even though fourth quarter premium negotiations were a fewweeks away. Offers were heard at $81-82/mt, below the Q3 premiums of $87-89/mt. Q4 premium talks are due to start next month. Spot tradingusually fades ahead of such talks as negotiators want to avoid them influencingthe outcome. But Western sellers appear not to be waiting for the Q4 premiumssettlement this year. "Western traders and producers have heavy stocks. Their salesin Asia [outside Japan] may be below expectations," said a source at aJapanese consumer. Western traders or producers were not available forcomment. But a source at a South Korean rolling mill confirmed that hiscompany had reorganized operations earlier this year, suspending output ofsome products, to compete more effectively with Chinese semi-finishedaluminium products imported into South Korea. Korean traders who import Chinese and Good Western aluminiumhave hefty stocks of up to three months on hand due to rolling mills that makefood packaging products cutting output, said a local trade source. The Japanese market, twice the size of the Korean market,appears to hold more opportunities for spot sales, which is why Westerntraders are keen to offer, said the Japanese consumer source. Japan's aluminium demand rises June-July ahead of summer, whencanned drink sales peak. The country's rolled aluminium shipments in Junewere 202,221 mt, up 1.6% year on year. The increase was due to robustdemand for can sheets, shipments of which were at a three-year high of 42,402mt. But the Japanese are not hungry for spot aluminium. There maybe some last-minute buying interest from beverage can makers, but this maycool next month ahead of the Q4 premium talks, sources said. --Mayumi Watanabe, mayumi_watanabe@platts.com For similar news, request a complimentary trial to Platts MetalsWeek at http://www.platts.com/Request%20More%20Information/index.xml?src=story or subscribe now at http://www.getmetalsweek.platts.com