August 21, 2014 / 11:31 AM / 4 years ago

UPDATE 1-Rusal indicates record $460 premium for Oct-Dec aluminium to Japan-sources

(Adds buyer comment, details)

TOKYO, Aug 21 (Reuters) - United Company Rusal Plc , the world’s biggest aluminium producer, has kicked off talks with Japanese buyers at a record high premium of $460 per tonne for October-December shipments of the metal, according to three sources.

Japan is Asia’s biggest importer of aluminium, and the premiums that it agrees to pay each quarter over the London Metal Exchange cash price set the benchmark for the region.

Rusal sent an email to Japanese buyers on Tuesday with an early indication of the premium of $460 per tonne, up 13-15 percent from the previous quarter, citing strong demand and higher overseas premiums, the sources involved in quarterly pricing negotiations said on Thursday.

The proposal is not considered to be the company’s formal offer and it may change after initial discussions with its customers and depending on rivals’ bids, the sources said.

Rusal declined to comment.

For the July-September quarter, Japanese buyers mostly agreed to pay a record premium of $400-408 per tonne PREM-ALUM-JP, up 8-12 percent from the prior quarter.

The latest quarterly pricing negotiations between Japanese buyers and other miners such as Rio Tinto Ltd , Alcoa Inc, and BHP Billiton are expected to begin next week and continue into next month.

The Rusal indication came far above Japanese buyers’ expectations.

Sumitomo Corp, a Japanese trading house, forecasts a premium of $415 per tonne for Oct-Dec aluminium shipment.

“The premiums will likely rise as the U.S. spot premiums, which have been leading global premiums in recent years, are higher,” Shingi Yamagiwa, team manager of light metals trading at Sumitomo, told Reuters in an interview on Thursday.

When asked to comment on the Rusal’s suggested level, Yamagiwa said: “That sounds out of place.” (Reporting by Yuka Obayashi; Editing by Michael Urquhart)

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