SINGAPORE, Sep 01, 2011 (Dow Jones) -- Some suppliers have concluded fourth-quarter aluminum contracts with Japanese consumers at a premium of $118 a metric ton on a cost, insurance and freight basis, a Tokyo-based trader said Friday.
Suppliers and consumers have agreed on contracts for around 40% of total fourth-quarter volumes at that level, which is slightly narrower than the third-quarter premium of $120-121/ton and in line with expectations.
The fourth-quarter talks will likely conclude next week, with traders pegging a final settlement at $118-120/ton.
"Some contracts have been signed at $118, but some people are still offering $120," the Tokyo-based trader said.
A London-based trader said the suppliers who haven't settled yet are hoping to fix charges "around $120," despite Singapore-based traders reporting spot premiums in Japan as low as $110 in the last fortnight.
Market participants are expecting strong Japanese demand in the final three months of the year, but concerns over the health of the country's export markets in the major Western economies are weighing on the market and pressuring premiums, traders have said recently.
"The spot market has been very quiet," the Tokyo-based trader said.
Three-month aluminum opened at $2,446.50/ton on the London Metal Exchange Friday, down 6.8% since the start of August amid concerns over the effect of slower U.S. and European growth on metal demand.