Japan’s Q3 QMJP offers and transaction price spreads were wide, with actual spot premiums for Japanese aluminum ingot currently at $395/mt, up $43.5/mt QoQ from Q2. However, the overall market remained weak, with spot transactions consolidating around $380/mt. The core driver behind the weakening spot premiums in the Japanese market this time was dual pressure from supply and demand. Supply side, market expectations for incremental global aluminum supply release continued to heat up. In addition, the pace of production resumptions at Middle Eastern aluminum capacity progressed steadily, reinforcing expectations for overall supply release outside China and capping upside room for spot premiums. Demand side, the traditional consumption off-season in Japan arrived as expected, with downstream end-users slowing their procurement pace and demand lacking momentum. This strengthened downstream bargaining power, and the tug-of-war between upstream and downstream tilted decisively in favor of buyers. As a result, the spread between Japan QMJP aluminum ingot offers and actual transaction prices stood at $65-70/mt. After the official release of Q3 QMJP prices, Japan’s spot market offers briefly firmed, but this did not lead to a recovery in transactions, and a stalemate between bulls and bears persisted. Against the backdrop of strengthening supply release expectations, spot prices are expected to undergo a pullback adjustment after their brief firmness, making the overall weak pattern for Q3 Japanese aluminum ingot premiums difficult to reverse.
Regional markets, spot aluminum ingot trading sentiment in Thailand and South Korea was very sluggish this week, with overall market activity low. Early in the week, as Q3 QMJP had not yet officially settled, traders and downstream enterprises generally held a wait-and-see sentiment, and the market was mainly characterized by just-in-time stockpiling. Following the official release of the latest Q3 QMJP prices, as the overall pricing fell short of earlier market expectations, sellers in Southeast Asia and South Korea raised their offers. However, judging from actual transactions, downstream enterprises in Thailand and South Korea still stuck to just-in-time procurement mode, with insufficient support from real market demand, and spot premiums maintained a pattern of consolidation at highs overall. In the short term, production resumptions in the Middle East and incremental supply release outside China will continue to cap the upside for premiums, while weak end-user demand during the off-season further compounds market pressure. Going forward, Asian aluminum ingot spot premiums are expected to continue a divergent and weak trend, with fluctuating offers and sluggish transactions remaining persistent features.
[Data source statement: Except for publicly available information, all other data are processed by SMM based on public data, market communication, and SMM’s internal database models, and are for reference only; they do not constitute decision-making advice.]
Data source: SMM
