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UPDATE 1-Some Japanese aluminium buyers agree to pay Q1 premium of $110/T -sources

* Premiums for Q1 aluminium 22 pct higher than previous quarter

* Rise marks first gain in physical premiums in four quarters (Adds details)

TOKYO, Dec 22 (Reuters) - Some Japanese aluminium buyers have agreed to pay producers a premium of $110 per tonne for metal to be shipped in the January-March quarter, five sources directly involved in the quarterly pricing talks said.

The deal, which marks a 22 percent rise from a $90 per tonne premium PREM-ALUM-JP in the previous quarter, is the first increase in four quarters, in line with a rise in overseas surcharges for physical aluminium.

Japan is Asia’s biggest importer of aluminium and the premiums for primary metal shipments it agrees to pay each quarter over the London Metal Exchange (LME) cash price set the benchmark for the region.

The buyers struck the deals over the past week with two producers, one cutting its proposal from an initial offer of $120 per tonne last month, the sources told Reuters, declining to be named due to the sensitivity of the talks.

Buyers in Japan are still negotiating with other global producers, with further deals expected in the coming weeks.

“One producer has lowered its offer as overseas spot premiums have stabilised and as there are plenty of inventories in Japan,” a source at a trading firm said.

Surcharges for physical aluminium in Europe have stabilized after climbing amid tighter availability to $160-$170 a tonne for duty-paid material in Rotterdam in November, up from $115-$135 in September.

Aluminium stocks held at three major Japanese ports fell 7.5 percent in November from the previous month to 401,000 tonnes, but they were still higher than 378,000 tonnes held a year ago, according to Marubeni Corp.

The latest quarterly pricing negotiations began last month between Japanese buyers and global producers, including Alcoa Inc, Rio Tinto and South32 Ltd, with initial offers ranging between $115-120 a tonne, according to sources at buyers. (Reporting by Yuka Obayashi; Editing by Himani Sarkar and Tom Hogue)