Q4 MJP aluminium premium soars despite languishing automotive sector

The premium for fourth-quarter supply of aluminium ingot to main Japanese ports (MJP) rose to its highest level in six years, continuing its upward climb despite a marked slowdown in domestic consumption in Japan.

Currently, domestic market fundamentals stand in stark contrast to a tightly supplied global market where premiums are supported by firm demand. Sources, weighing in on why premiums have climbed amid slow demand, wonder about "limited active participation" and whether there is meaningful pricing benefit with the emergence of offers made by traders.
Fastmarkets' quarterly premium for the supply of aluminium to main Japanese ports (MJP) was settled at $215-220 per tonne over the London Metal Exchange cash price for the fourth quarter of 2021 - 21.8% higher than the third-quarter benchmark of $172-185 per tonne and almost three times the $88-per-tonne premium in the fourth quarter of 2020.
The spot market, meanwhile, continues to lag behind the fourth-quarter premium and was this week reported at $175-200 per tonne, with deals trading within the range, even as quarterly negotiations concluded on a strong note.

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