FOCUS: Quarterly MJP aluminium negotiations changing in low-demand Covid-19 market

The global Covid-19 pandemic, coupled with an already weakening economy in Japan, has changed the dynamics of how quarterly main Japanese ports (MJP) aluminium contract negotiations are concluded.

Third-quarter negotiations are ongoing but have thrown up many anomalies from the traditional process. The quarterly MJP benchmark is negotiated each quarter, usually between Japanese buyers and major overseas producers.
The benchmark serves as reference for supply contracts across Asia, not just Japan, for both primary aluminium ingots and aluminium products.
The latest deals concluded at premiums of $60 per tonne and $68 per tonne on June, while the first third-quarter deal settled a week earlier at $85 per tonne.
During usual negations, deals may conclude at different levels while the market comes to a consensus on the benchmark. But these deals would usually conclude within a tight range.
But there is currently a $25-per-tonne spread between the lowest and highest deal concluded for the third quarter so far - something traders told Fastmarkets is virtually unheard of.

“We can’t believe how widespread it is currently. Some tell us $60 per...

Published

Karen Ng

June 15, 2020

03:55 GMT

Singapore