Tokyo : Itochu Corporation, a Japanese trading company, plans to sell at least 30,000 metric tonnes of aluminium produced by Emirates Aluminium Company in Japan and other Asian markets as buyers seek an alternative to Russian supply.

Itochu acts as a sales agent in Japan for Dubai Aluminium Company, the largest smelter in the Middle East, and began importing the metal from Emirates Aluminium this year, Yasuhiro Terashita at Itochu's corporate communications division said yesterday in an interview. The producer, known as Emal, is a joint venture between Dubai Aluminium and Abu Dhabi state-owned investment company Mubadala.

Disruption in shipments from Russia, the second-largest exporter to Japan, caused a surge in physical prices last year. Middle Eastern countries such as the UAE are expanding into the aluminium business as their access to cheap fuel enables low-cost production. Emal, which aims to become the world's largest smelter, began production in December.

"We are allowed by Emal to sell their metal in Asia as we have maintained a long-term business relationship" with Dubai Aluminium, its parent company, Terashita said. Itochu aims to expand aluminium sales in South Korea and Taiwan, he added.

Japan's imports of refined aluminium from Russia slumped 45 per cent to 230,713 tonnes in 2009 from a year earlier, data from the Ministry of Finance showed.

Venezuelan imports

Imports from Venezuela also plunged 73 per cent to 6,026 tonnes last year. Industria Venezolana de Aluminio, the nation's largest state-aluminum smelter, didn't ship the metal to Japanese stakeholders as it didn't renew a supply contract with them, according to Showa Denko K.K., the largest Japanese shareholder.

Fees

Aluminium producers raised the fee they charge Japanese buyers to the highest level in at least 14 years in the three months ended March 31, after shipments from Russia dropped.

Premiums jumped to $125 (Dh459) to $130 a ton neover the London Metal Exchange cash price last quarter from $115 to 125 in the three months ended December 31.

The fee retreated to $122 to $124 this quarter as supply to Asia increased after Middle Eastern smelters began production. Emal agreed to supply Daewoo International Corporation of South Korea, Asia's largest importer after Japan, according to media. Initial capacity of the smelter will reach 700,000 tons annually by the end of this year.