SE Asia Aluminium Premiums

Southeast Asia aluminium premiums may begin to move separately from Japan’s benchmark market as Vietnamese and Korean buyers show greater willingness to buy and remelt low-priced Chinese-origin semi-finished aluminium products.

Southeast Asia Premiums Narrow as Buyers Reassess Supply

The P1020 aluminium premium cif Thailand was assessed at $260–320/t, narrowing from $280–350/t a week earlier. The cif Vietnam premium also narrowed to $270–320/t from $285–355/t over the same period.

In South Korea, deals were reported at $280–320/t fca Korea. Western-origin and free-trade-agreement cargoes were still able to trade above $300/t on a cif Thailand and Vietnam basis, showing that origin remains an important pricing factor in the Asian aluminium market.

Chinese Semi-Finished Aluminium Changes Buyer Economics

A key reason for the potential decoupling is the growing acceptance of Chinese-origin semi-finished aluminium in Vietnam and South Korea. Traders said low-priced export offers for products such as aluminium wires under HS code 76149000 are attracting interest from buyers that can remelt the material into P1020 ingots.

Offers for high-purity aluminium stranded wire were heard between an $80/t discount and a $100/t premium to London Metal Exchange prices. With estimated remelting costs of $150–200/t, the effective cost of buying wire and converting it into P1020 ingot could reach around $200–300/t, making it competitive against standard P1020 purchases.

Japan Remains More Origin-Sensitive

Japan’s aluminium premium market is typically more sensitive to origin, contract structure, and traditional primary aluminium supply channels. By contrast, some Southeast Asian buyers appear more open to alternative feedstock routes, especially when remelting economics are favorable.

This creates the possibility that Southeast Asia premiums could weaken or stabilize independently from Japan if Chinese semi-finished aluminium continues to flow into the region at competitive prices. However, the trend depends heavily on China’s export tax rebate policy, which currently supports certain semi-finished aluminium exports.

Market Impact

○ Impacted Metals: P1020 aluminium ingot, high-purity aluminium stranded wire, Chinese-origin aluminium semi-finished products, remelt aluminium ingot

○ Direction: Bearish

○ Time Horizon: Near-term

○ Affected Industries: Aluminium trading, remelting, wire and cable, extrusion, die casting, packaging, automotive components

○ Related Price Reports: Aluminum Weekly Price Report

○ Watch Item: Monitor whether China changes its 13% export tax rebate policy for semi-finished aluminium products as export volumes rise.

SuperMetalPrice Commentary
The key issue is not only the level of Southeast Asia aluminium premiums, but the changing definition of acceptable supply. If buyers can economically remelt Chinese semi-finished aluminium into P1020-equivalent material, regional premiums may face structural pressure even when traditional primary aluminium cargoes remain tighter.
For traders and buyers, origin policy, rebate risk, and remelting costs are now becoming as important as LME prices and regional premiums. Japan may remain a more disciplined premium benchmark, while Southeast Asia could become more flexible and more exposed to Chinese semi-finished product flows.