Japanese aluminum premium negotiations from April to June were raised by 7-14%

Overseas resource giants and Japanese rolling companies have negotiated on the aluminum ingot premium from April to June 2025. The amount proposed by the overseas resource giants as sellers is US$245-260 per ton, which is 7-14% higher than the previous quarter (January to March) which hit a record high in about 10 years. US President Trump’s tariff policy is affecting Japan’s domestic aluminum negotiations.

The premium is the cost that rolling companies and others add to the aluminum ingot price of the international index London Metal Exchange (LME) when purchasing aluminum ingots from resource giants. The premium is determined through quarterly negotiations taking into account freight, handling fees and regional supply and demand.

Trump’s tariff policy is the background for the price increase proposed by overseas resource giants. The Trump administration imposed a 25% tariff on steel and aluminum products imported from the United States on March 12. Those involved in the premium negotiations are more concerned about the tariff policy on Canada than the US’s unified tariff on aluminum products worldwide.

The United States imports a large amount of aluminum from neighboring Canada. The United States imposed tariffs on Canada and Mexico on March 4, but exempted them for a month until April 2 if they were in compliance with the United States-Mexico-Canada Agreement (USMCA). However, this is only a temporary measure and tariffs are likely to be imposed in the end.

In addition, Trump said on March 11 that he would increase the tariff rate on Canadian aluminum products from 25% to 50%. Although the decision was withdrawn on the same day, concerns remain.

Affected by Trump’s tariff policy, there may be a decrease in aluminum products exported from Canada to the United States. The United States is highly dependent on aluminum imports, and if tariffs are reflected, it may increase imports from the Middle East or Australia to replace Canadian products. The expectation of a decrease in aluminum exports from the Middle East and other regions to Asia has led to a premium increase when purchasing in Japan.

Domestic demand in Japan continues to stagnate, and domestic inventories are also increasing. According to Marubeni data, the port inventory of new aluminum ingots in Japan (Yokohama, Nagoya, Osaka) was about 313,000 tons as of the end of February, exceeding the standard of 300,000 tons for supply and demand balance.

The view of the demand side is: “Considering the current sluggish aluminum demand, the premium in April to June should be lower than that in January to March, and the reasonable level is around US$200 to US$210 per ton.” The negotiation process may become very intense.