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Q3 premium marks second consecutive quarterly fall

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Settles below initial offers of $122-$145

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Local demand was weak even before impact from U.S. tariffs

(Adds quotes and details in paragraphs 4-14)

By Yuka Obayashi

TOKYO, June 30 (Reuters) - The premium for aluminium

shipments to Japanese buyers for July to September was set at

$108 per metric ton, down 41% from the current quarter,

reflecting sluggish demand, six sources directly involved in

pricing talks said.

The figure, lower than the $182 per ton paid in April to

June, marks a second consecutive quarterly decline and the

lowest level since the first quarter of 2024. It comes below

initial offers of $122 to $145 per ton 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 (LME)

cash price set the benchmark for the region.

"Domestic aluminium demand has been weak for about a year,

even before the U.S. tariffs kicked in," a trading house source

said, referring to the Trump administration's levies on

aluminium and cars.

"The decline in Japan's premiums reflects slack demand

and ample supply in Asia," the source added.

Aluminium stocks at three major Japanese ports

rose to 331,000 tons at the end of May, up 3.3%

from the previous month, according to Marubeni ( MARUF ).

A second source at a producer said soft overseas

premiums also contributed to the drop.

"U.S. premiums rose briefly but eased lately as buyers

built up stocks ahead of tariffs," the source said.

"We expect inventories to clear and premiums to rebound

in the next quarter, which could tighten Asian supply," he

said.

U.S. President Donald Trump doubled aluminium import

tariffs to 50% from June 4 to support domestic production of the

metal used in the transport, packaging and construction

industries.

In the U.S., physical market premiums fell after

peaking at a record 62.50 cents a lb on June 6 as traders also

speculated that tariffs on Canadian shipments could be cut,

metal industry sources said.

While Japan has seen limited local impact, buyers worry

that demand from automakers might fall. Tokyo is pushing

Washington to exempt its carmakers from a 25% auto tariff. Japan

also faces a 24% "reciprocal" tariff rate starting on July 9

unless it can negotiate a deal with Washington.

The sources declined to be identified due to the sensitivity

of the matter.

The quarterly pricing talks began in late May between

Japanese buyers and global suppliers, including Rio Tinto

, and South32 ( SHTLF ).