Japan's aluminium buyers to pay record high Q1 premiums of $425/T -sources

TOKYO, Jan 20 (Reuters) - Japan's aluminium premiums for January-March shipments were mostly set at a record high of $425 per tonne, up 1.2 percent from the previous quarter, on higher overseas rates, five sources directly involved in the talks said.

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

Two end-user sources and two trader sources said most deals were done at $425, while a source at one of the producers said more than 90 percent of the deals were booked at $425.

Another source at an end-user said at least one deal was agreed at $422.5 per tonne.

Negotiations are still continuing between some suppliers and buyers. The pricing talks began late November between Japanese buyers and global miners including Rio Tinto Ltd (Xetra: 855018 - news) , Alcoa Inc (NYSE: AA - news) and BHP Billiton (NYSE: BBL - news) .

It is unusual for the two sides not to reach an agreement before the start of the quarter, but talks have dragged on this time as buyers in Japan remain unwilling to boost premiums given a pile up of metal at the country's ports. (Reporting by Yuka Obayashi; Editing by Himani Sarkar)