Primary Aluminium Market: Weak Demand Weighs on Commodity Prices

Subdued Trading, Cautious Buyers

In Japan, buyers are mainly restocking on an as-needed basis. In the United States, trading is thin, while in Vietnam large deals are almost absent. In South Korea and Thailand, the gap between offer prices and the levels buyers are willing to accept continues to hamper transactions.

Supplies of primary aluminium from the Middle East and Australia are relatively abundant, while Japanese buyers are being more selective about their sources.

Q4 Premium Expectations Should Be Distinguished from Settled Prices

In aluminium trading, the MJP premium is commonly cited for imported aluminium delivered at Japan's main ports. It is also a reference level tracked across the Asian market, with a distinction drawn between the spot premium and the quarterly premium.

SMM has noted expectations for the Q4 2026 MJP premium at around USD 280–290 per tonne. This is an expectation at the time of the source article, not an officially settled result or the price of raw aluminium.

A Lower Premium Does Not Mean the Total Aluminium Purchase Price Falls Accordingly

To assess market developments correctly, one must distinguish between the reference aluminium price on the London Metal Exchange (LME) and the premium component in physical trade. According to LME documentation, metal contract prices are typically built from a reference price, then adjusted by premiums or discounts to reflect the characteristics of the goods and the delivery terms.

The premium can be affected by specifications, quality, place of delivery, transport and insurance. Therefore, a lower premium reflects a change in only one component of the price. Under this mechanism, the total purchase price can still rise if the reference aluminium price increases by more than the decline in the premium.