Sources involved in the pricing negotiations said that Japanese aluminum buyers have agreed to pay a quarterly premium of $255 per ton for imported primary aluminum to be shipped from October to December 2026. This represents a decrease of approximately 35% compared to the $395 premium in the third quarter.
The premium is based on the LME spot benchmark price and is calculated using the Cost, Insurance, and Freight (CIF) method, reflecting the changing supply and demand dynamics in the Japanese aluminum market after the supply shortage in the middle of the year.
Looking at the quarterly price trends for 2026, the aluminum premium in Japan experienced significant fluctuations throughout the year. The premium was $195 per ton in the first quarter, quickly rising to $350 in the second quarter, reaching $395 in the third quarter, and falling back to $255 in the fourth quarter.
The premium rose significantly in the second and third quarters, mainly reflecting market concerns over damaged aluminum smelting capacity in the Middle East, transportation disruptions, and tight supply of high-quality Western primary aluminum. As some damaged capacity gradually recovered, alternative transportation routes came into play, and Asian supply improved, the urgency for additional purchases by buyers decreased, leading to a significant drop in the premium in the fourth quarter.
From a historical perspective, the $255 fourth-quarter premium is still in a relatively high range. The premium in the fourth quarter of 2025 was only $86 per ton, in 2024 it was $175, in 2023 it was $97, and in 2022 it was $99, all significantly lower than the 2026 fourth-quarter level. However, the fourth-quarter premium in 2026 was still lower than the 2014 fourth-quarter level of $420 and the historical high range of $254 to $255 in 2012. Overall, the premium rose significantly first and then dropped significantly, reflecting changes in supply risk premiums.
The future trend of the Japanese aluminum premium will depend on the progress of smelting plant resumption in the Middle East, the recovery of maritime supply, and the impact of new production capacity in Indonesia on the Asian market.
If regional supply continues to increase while Japanese terminal demand remains weak, the premium may face further pressure; if high-quality Western primary aluminum supply remains tight or transportation risks re-escalate, prices may gain support.
