On March 3rd, foreign news reported that due to the escalating conflict in the Middle East, global aluminum producers have either withdrawn or allowed their quarterly premium quotations to Japanese buyers to expire, urgently assessing the safety risks of shipping through the Strait of Hormuz. As the pricing benchmark for the Asian aluminum market, the suspension of aluminum premium negotiations in Japan directly affects the regional aluminum price trend.
According to market participants involved in the pricing negotiations, South32 and Rio Tinto had previously quoted Japanese buyers a premium for the April-June 2026 shipping season: South32 quoted $220/ton, while Rio Tinto quoted $250/ton, representing an increase of 13%-28% compared to the current quarter, signaling a rise in overseas premiums. The South32 quotation expired last Friday, while Rio Tinto officially withdrew its quotation on March 2nd, primarily due to the need to assess the potential impact of conflicts on cargo transportation and supply disruptions.
Japan is a major importer of primary aluminum in Asia, and its quarterly primary aluminum premium (the premium above the LME spot price) serves as the pricing benchmark for the East Asian aluminum market. The collective suspension of quotations by international giants this time indicates that the short-term regional pricing mechanism has entered a wait-and-see state, and the supply risk premium has rapidly increased.
The Middle East region accounts for approximately 9% of global aluminum production capacity, and the transportation of related raw materials and finished products is highly dependent on the Strait of Hormuz. The escalating situation has triggered market concerns about shipping disruptions, raw material shortages, and export delays, driving up LME aluminum prices, narrowing spot premiums, and increasing market expectations of tightening supply.
Industry insiders indicate that if the benchmark premium in Asia increases due to a rise in risk premium, even a short-term supply shortage could drive the regional aluminum premium to continue to rise for several months, further supporting aluminum prices.
Post time: Mar-04-2026