Insiders have disclosed that Rio Tinto Group and South32 Company have offered record-high premium prices for aluminum supply in the third quarter to Japanese customers.
Against the backdrop of the US-Israeli-Iraq war which led to a tightening of global markets, Rio Tinto proposed a premium of $460 per ton for refined aluminum, while South32 offered $480 per ton. This was over $100 per ton higher than the premium agreed upon by Japan and the miners for the second-quarter supply deal.
Since the outbreak of the US-Israeli-Iran conflict at the end of February, the Strait of Hormuz has been almost completely closed, cutting off the supply from an area accounting for approximately 9% of global production capacity. The London aluminum futures have risen by about 17%. In 2025, about one-third of Japan's aluminum is imported from the Middle East.
As a result of this, the premium in the Midwestern United States (an additional fee based on the global benchmark LME aluminum price) has risen to an all-time high, continuing the upward trend following President Trump's imposition of metal tariffs.
Analysts pointed out that the record-high premium offer reflects the severe supply shortage situation faced by the global aluminum market due to the disruption in supply from the Middle East.
Whether Japanese buyers will accept these record-high premiums will depend on their assessment of downstream demand and the availability of alternative supplies.
As the peak demand season for the northern hemisphere's summer approaches, the tight supply situation in the aluminum market is expected to persist, which may further drive up the global aluminum premium level.
The market is closely monitoring the developments in the situation at the Strait of Hormuz and their ongoing impact on the global aluminum supply chain.
