Some Japanese aluminium buyers have agreed to pay global producers a premium of USD 395 per tonne over the London Metal Exchange benchmark for July-September 2026 shipments, up 12–13 per cent from the previous quarter, according to industry sources.
The premium compares with USD 350–353 per tonne paid for April-June deliveries and marks the third consecutive quarterly increase. It is also the highest since January-March 2015, when premiums touched USD 425 per tonne.
Japan is a major aluminium importer in Asia, making its quarterly premium settlements an important reference for primary metal shipments. The premium is paid on top of the prevailing LME aluminium price.
Another step up from Q2
The latest settlement extends a rise that was already evident in the second quarter. Japanese buyers agreed to pay around USD 350 per tonne for April-June shipments, while global producers had proposed premiums of USD 220–250 per tonne at the end of February. Those proposals were 13–28 per cent higher than the USD 195 per tonne agreed for the preceding quarter.
The jump also brings renewed attention to how physical aluminium is priced. A transaction typically has two parts: the LME cash price, which reflects broader global supply and demand, and a separately negotiated physical premium.
That premium covers freight, insurance and financing costs, but it also reflects how much metal is actually available for delivery in a particular market and during a particular period. When nearby supply becomes harder to secure, the premium can rise even if the underlying LME price follows a different path.
Tight availability strengthens producers' hand
The Q3 2026 increase comes against geopolitical disruptions that have affected aluminium availability, altered supply routes and trade flows, and reduced the amount of spot metal accessible to Asian buyers. Those pressures had not materially eased as Q3 negotiations progressed, leading producers to price offers around continued tightness in the physical market.
Low inventories in LME warehouses have reinforced that pressure. With less exchange-held metal available, buyers have fewer options to fall back on the spot market instead of contracted supply, giving producers greater leverage in negotiations.
Note: This article is published in accordance with an article exchange agreement between Mysteel and AL Circle.
