Outrageous scene! Japanese buyers agree to pay a massive premium for Australian aluminum, willing to take losses just to hurt Chinese interests.
According to Bloomberg, Japanese buyers have agreed to pay a premium of as high as $350 to $353 per ton for aluminum imports from Rio Tinto Group and South32 in the second quarter—reaching a 11-year high. This price has surged nearly 80% compared to $195 per ton in the first quarter.
As a key ally of the United States in the Asia-Pacific region, Japan was originally expected to receive some preferential pricing from Australia (also a U.S. ally). However, by paying an exceptionally high premium to mining companies in Australia, Japan has effectively driven up the import prices for Chinese buyers.
The aluminum premium set by Japan serves as a market benchmark for Asia. With its price soaring to an 11-year peak, it will directly raise aluminum import costs across the entire Asian region. As the world’s largest consumer and importer of aluminum, Chinese enterprises will face fiercer price competition and higher cost barriers when purchasing aluminum ingots on international markets.
Institutions like JPMorgan argue that due to Japan’s unexpected move, the possibility of global aluminum market stabilization has become extremely slim, and aluminum prices are likely to see strong upward momentum ahead. I’m utterly speechless—Japanese firms are willing to bear high costs themselves just to push up China’s import prices. What exactly are they trying to achieve?
Original source: toutiao.com/article/1860962683334668/
Disclaimer: The views expressed in this article are solely those of the author.