FOCUS: MJP aluminium benchmark for Q1 2021 surpasses expectations on open arb, container shortage

For the first quarter of 2021, the quarterly benchmark main Japanese port (MJP) aluminium premium has settled at $130 per tonne, its highest level since it was settled in July-September 2018 at $132 per tonne.

Market participants said that this high premium was unexpected, and attributed it mostly to the open Chinese arbitrage window, which at premiums as high as $150 per tonne was driving aluminium supply away from Japan.
“It’s so expensive now, but supply is tight,” a Japan-based trader said.
The settlement of $130 per tonne was a leap of 47.7% from $88 per tonne in the fourth quarter of 2020.
At $130 per tonne, the premium also jumped to 56% higher than the first-quarter benchmark for 2020, which settled at $83 per tonne.
“But most traders and producers have started to swing the metal back to Japan, because the premium here is high now,” the Japan-based trader added.
Chinese arbitrage pushes up Asia premiums
The Chinese arbitrage window which opened in November, for the fourth time in 2020, also created competition for Japanese demand.

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Karen Ng

January 05, 2021

20:25 GMT